SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
save plan
Student Loan Payments Paused for Millions Amid Court Fight Over Relief Plan
While praising the Biden administration's move "to stave off this reckless attack from extremist politicians and judges," advocates stressed that "broad-based debt cancellation is the only solution."
Jul 19, 2024
The Biden administration responded to an appellate court temporarily blocking one of its student debt relief programs by pausing payments for the 8 million borrowers already enrolled—a move welcomed by advocates, even as some called for further action.
U.S. Secretary of Education Miguel Cardona acknowledged in a statement that the 8th Circuit Court of Appeals' ruling against President Joe Biden's Saving on a Valuable Education (SAVE) plan "could have devastating consequences for millions of student loan borrowers crushed by unaffordable monthly payments if it remains in effect."
"It's shameful that politically motivated lawsuits waged by Republican elected officials are once again standing in the way of lower payments for millions of borrowers," Cardona continued. "Borrowers enrolled in the SAVE plan will be placed in an interest-free forbearance while our administration continues to vigorously defend the SAVE plan in court. The department will be providing regular updates to borrowers affected by these rulings in the coming days."
The appellate court's Thursday ruling was just the latest in a series of legal decisions endangering one of the administration's surviving policies to help Americans with burdensome student loans. Biden's attempt to roll out a broader debt cancellation program last year was thwarted by the U.S. Supreme Court's right-wing justices.
Despite that setback, the Democratic president has continued to pursue relief programs while seeking reelection in November. Biden and Vice President Kamala Harris are preparing to face former Republican President Donald Trump and Sen. JD Vance (R-Ohio). Analyses have warned that Trump's return to the White House would worsen the U.S. student debt crisis.
"It wasn't so long ago that a million borrowers defaulted on their student loans every single year, mainly because they couldn't afford the payments," Cardona noted Friday. "The SAVE plan is a bold and urgently needed effort to fix what's broken in our student loan system and make financing a higher education more affordable in this country. The Biden-Harris administration remains committed to delivering as much relief as possible for as many borrowers as possible."
"Already, we've approved an unprecedented $169 billion in relief for nearly 4.8 million Americans, including teachers, veterans, and other public servants, students who were cheated by their colleges, borrowers with disabilities, and more," he added. "And from larger Pell Grants to free community college, President Biden, Vice President Harris, and I continue to believe that college affordability is a cause worth fighting for—and we're not giving up."
The Student Borrower Protection Center, which had advocated for a payment pause after Thursday's ruling, thanked Cardona "for taking swift action to protect the millions of borrowers enrolled in SAVE."
"Opponents of SAVE have inflicted mass confusion and chaos across the entire student loan system—all borrowers are at risk," the group added. "Halt student loan payments and protect borrowers ASAP!"
American Federation of Teachers president Randi Weingarten put out a statement on Friday praising the administration's action "to stave off this reckless attack from extremist politicians and judges."
"But we shouldn't even be in this situation," she stressed. "These borrowers are on a roller coaster that's being forced off the rails by far-right politicians who will do anything in their power to hurt them, rather than help them get the relief they deserve."
"We are grateful that the Biden-Harris administration will continue to push for affordable monthly payments as bad faith actors continue to throw up roadblock after roadblock," she added. "In the end, broad-based debt cancellation is the only solution—and we will continue to advocate for it through every avenue available."
While also welcoming the pause as the court battle continues, the Debt Collective said Friday: "But no need to stop there—pause everyone's payments. Unburden them from what has been."
Recalling when student debt payments were halted because of the Covid-19 pandemic, initially under Trump and then Biden, the group also said that the president "never should have restarted student loan payments," calling it "an unforced error."
Keep ReadingShow Less
Chaos-Causing Court Sides With GOP Attack on Biden Student Debt Relief Plan
Advocates are calling for "shutting the student loan system down until borrowers have access to the rights they were promised."
Jul 18, 2024
Student debt cancellation advocates on Thursday responded to a federal appeals court blocking implementation of one of U.S. President Joe Biden's relief programs by demanding a shutdown of the whole system to spare borrowers and the economy.
The U.S. Court of Appeals for the 8th Circuit's temporary ruling against the administration's Saving on a Valuable Education (SAVE) plan comes just over a year after the Supreme Court struck down Biden's sweeping student debt cancellation proposal.
Although the high court's right-wing supermajority has thwarted Biden's attempt to deliver his promised broad relief, the administration has pursued initiatives including the SAVE program, which sets monthly payments based on borrowers' income.
Over half of the more than 8 million borrowers who have enrolled in the program have a $0 monthly payment, according to the U.S. Department of Education. SAVE also enables borrowers to have their balances canceled after 10, 20, or 25 years.
GOP state officials led by Kansas Attorney General Kris Kobach challenged the program, leading to Thursday's ruling—just the latest in a series of various decisions about the program. The 8th Circuit issued a stay until the court rules on a request for a preliminary injunction.
"Today's extreme, unsigned, single-sentence order from a judge out of Missouri's 8th Circuit Court of Appeals just sent the student loan system into chaos and borrowers will be forced to pay the price," warned Student Borrower Protection Center (SBPC) executive director Mike Pierce in a statement.
"It is clear that the Biden administration can and must protect borrowers from this partisan lawfare—that means shutting the student loan system down until borrowers have access to the rights they were promised under the law," he argued.
In addition to echoing Pierce's call for shutting down the system "to mitigate the widespread economic harm that could be imposed on borrowers," SBPC deputy executive director Persis Yu suggested the legal battle was politically motivated.
"Right-wing politicians are using the courts to wreak havoc on the student loan system and put the economic stability of tens of millions of borrowers and their families at risk. Make no mistake: These lawsuits are shameful political gamesmanship designed to hurt President Biden at all costs, and borrowers are merely collateral damage," Yu said. "Unfortunately, today, the special interests have prevailed, imperiling the financial security of millions and throwing the student loan system into an untenable chaos."
An Education Department spokesperson said in a statement Thursday that "we are assessing the impacts of this ruling and will be in touch directly with borrowers with any impacts that affect them."
"Our administration will continue to aggressively defend the SAVE Plan," the spokesperson added. "And, we won't stop fighting against Republican elected officials' efforts to raise costs on millions of their own constituents' student loan payments."
The 8th Circuit's decision came on the same day as the Biden administration's announcement that it is canceling $1.2 billion in student loans for borrowers who work in public service through changes to another federal program.
"These 35,000 borrowers approved for forgiveness today are public service workers—teachers, nurses, law enforcement officials, and first responders who have dedicated their lives to strengthening their communities, and because of the fixes we made to Public Service Loan Forgiveness, they will now have more breathing room to support themselves and their families," Biden said in a statement.
Biden—who has faced progressive pressure to keep pursuing bolder debt relief policies—is currently seeking reelection, though the Democrat has endured growing calls to step aside since his poor debate performance last month.
Former President Donald Trump this week formally became the Republican nominee and announced Sen. JD Vance (R-Ohio) as his running mate. Multiple analyses have warned that the U.S. student debt crisis would worsen under Trump.
Keep ReadingShow Less
GOP Lawmakers Move to Block Biden's Helping Hand to Student Loan Borrowers
"We condemn this move to block a plan that will provide significant financial relief to low-income borrowers and communities of color," said one advocate.
Sep 06, 2023
Just as the Biden administration announced this week that 4 million people have enrolled in its new income-driven repayment plan for student loan borrowers just two weeks after it was launched, Republican lawmakers in Congress announced plans to rip the debt relief away from Americans—saddling them with a continued financial burden that has left many working people unable to purchase homes, provide for a family, and save money.
Led by Sens. Bill Cassidy (R-La.), John Thune (R-S.D.), and John Cornyn (R-Texas), 17 Republican senators said Tuesday that they would use the Congressional Review Act (CRA), a tool members of Congress can invoke to overturn final rules set by federal agencies, to repeal the Saving on a Valuable Education (SAVE) plan.
The plan bases student debt monthly payments on borrowers' income and family size, allowing those who earn $15 per hour or less to avoid any monthly payment. An estimated 1 million people are expected to have no monthly payments under the plan and other borrowers are expected to save at least $1,000 per year compared with other income-driven repayment plans.
Education Secretary Miguel Cardona said Tuesday that Americans are submitting new applications for the SAVE plan each day "so that they, too, can take advantage of the most affordable student loan repayment plan in history."
"This is real money President [Joe] Biden is putting back into the pockets of working families," Cardona said last month when the program was launched. "And when borrowers struggle to make ends meet, we're not going to kick them while they're down."
But Republicans including Reps. Virginia Foxx (R-N.C.) and Lisa McClain (R-Mich.), who have introduced a companion bill to Cassidy's in the U.S. House, claim the program is "illegal" and will "leave mountains of debt at the feet of taxpayers while absolving millions of borrowers of their loans."
Jaylon Herbin, director of federal campaigns at the Center for Responsible Lending, said Wednesday that lawmakers should "oppose the CRAs to repeal SAVE."
"Senate Democrats will strongly oppose this Republican measure should it come to the floor for a vote, and we will stand with student loan borrowers as we continue to push for as much relief as possible."
"We condemn this move to block a plan that will provide significant financial relief to low-income borrowers and communities of color," said Herbin. "SAVE provides hope for borrowers as the administration continues to fight alongside advocacy groups to find other ways to achieve broad-based student loan relief. We continue to support President Biden in his quest to make our educational finance system fairer for all borrowers and oppose harmful legislation, such as these CRAs, that will set our already flawed student loan repayment system back to the pre-pandemic era."
Debt relief campaigners and legal experts have said for years that the Biden administration is legally able to wipe out student debt—going much further than the SAVE plan does—using the Higher Education Act of 1965, which allows the education secretary "to enforce, pay, compromise, waive, or release any right, title, claim, lien, or demand" related to federal student loans.
Republicans including Cassidy previously tried to block Biden's debt relief plan which would have canceled up to $20,000 in debt for some student loan borrowers, before the right-wing majority on the U.S. Supreme Court struck down the proposal.
The GOP announced its latest plan to stop borrowers from benefiting from the income-based repayment plan as the administration works on a broad relief plan under the Higher Education Act, and just days after interest on federal student loans began to accrue again following a pause that began during the coronavirus pandemic.
About half of student borrowers in a poll released by Life and My Finances said they would not be able to afford monthly payments when they resume next month.
While "Democrats work hard to find new ways to provide relief for borrowers in need," said Senate Majority Leader Chuck Schumer (D-N.Y.), "Republicans, instead of working with us to find a fix to our broken student loan system, immediately shoot them down."
"Republicans use the same old, tired excuse: that student loan relief only helps the few, the wealthy. That's utter nonsense," said Schumer. "President Biden's SAVE plan will benefit the Americans who need it most: working and middle-class families, students of color, community college students, and borrowers working in public service."
"Senate Democrats will strongly oppose this Republican measure should it come to the floor for a vote," he added, "and we will stand with student loan borrowers as we continue to push for as much relief as possible."
Keep ReadingShow Less
Most Popular