About three million people with student loans are on hold from making payments while the Biden administration protects the program in court against lawsuits backed by Republicans.
The U.S. Department of Education told CNBC that people on the SAVE plan (Savings on a Valuable Education) who have a monthly payment of more than $0 will not have to pay anything on their debt for now.
Two federal courts in Kansas and Missouri put a temporary hold on important parts of President Joe Biden’s SAVE plan earlier this week.
The preliminary injunctions came about because of lawsuits that were made earlier this year by states led by Republicans, like Florida, Arkansas, and Missouri. The states said the Biden administration was going too far and trying to find a backdoor way to forgive student loans after the Supreme Court threw out its big plan last year.
Many people who are in the SAVE plan only pay 5% of their extra monthly income toward their debt. People who make $32,800 or less have no monthly payment requirements. It also cuts down on the time it takes for many people to get their debts forgiven in full.
Student Debt Update:
Republican elected officials are suing to stop our Administration’s affordable student loan repayment plan.
We strongly disagree with this week’s rulings on our SAVE Plan.
— The White House (@WhiteHouse) June 26, 2024
The US Department of Justice has asked Kansas to put an end to the order.
“Republican elected officials continue to fight to stop their constituents from saving money, having their monthly payments cut in half, and getting help,” a spokesperson for the Education Department said.
Millions of Americans were going to start seeing lower monthly student loan payments this July under our SAVE Plan.
This relief is now on hold because Republican elected officials are suing to stop it.
— The White House (@WhiteHouse) June 27, 2024
They also said that the Biden government “will not stop defending the SAVE Plan, which is the most affordable repayment plan ever.”
This will be taken care of by the Department of Education in the next few days. Their loans will be put on hold, so they won’t have to pay interest on them.
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The Department of Education said that the 4.5 million students who have a $0 monthly payment under SAVE will still not owe anything and will be considered to be up to date on their payments.