Chicago – June 24, 2024
On Monday, two federal judges in Kansas and Missouri sided with several Republican-led states, partially blocking President Joe Biden’s student debt relief plan that would cost billions of dollars.
In Kansas, U.S. District Judge Daniel Crabtree stopped the U.S. Department of Education from moving forward with parts of the plan set to start on July 1. This plan aims to lower monthly payments and speed up loan forgiveness for millions of Americans. Shortly after, U.S. District Judge John Ross in Missouri issued a preliminary injunction, preventing further loan forgiveness under Biden’s Saving on a Valuable Education (SAVE) Plan.
The SAVE Plan offers more generous terms than previous income-based repayment plans. It lowers monthly payments for eligible borrowers and forgives debt for those with original principal balances of $12,000 or less after 10 years.
Biden announced the SAVE Plan in 2022 and a separate plan to cancel up to $20,000 in debt for up to 43 million Americans. This broader plan, worth about $430 billion, was blocked by the U.S. Supreme Court in June 2023. However, the court did not address the SAVE Plan. The White House says over 20 million borrowers could benefit from the SAVE Plan, with 8 million already enrolled.
