Federal Judges Issue Injunctions Against Loan Forgiveness Plan

President Biden’s new student loan repayment plan is in doubt after a pair of federal judges issued separate injunctions Monday preventing the government from fully implementing and forgiving any more loans through the program while they consider lawsuits to end the policy. Via the Washington Post:

The dual rulings leave myriad questions about whether borrowers can still enroll in the plan or receive promised loan cancellation. Millions of Americans could be affected.

In Kansas, U.S. District Judge Daniel D. Crabtree blocked the Biden administration from launching the final component of the Saving on a Valuable Education program, commonly known as Save. Borrowers with undergraduate debt were set to see their payments cut in half in July — from 10 percent to 5 percent of income above 225 percent of the federal poverty line. Borrowers who also have graduate loans would have had their payments lowered by the weighted average between 5 percent and 10 percent.

That feature of the plan, which launched in October, will be shelved while a lawsuit is litigated.

Crabtree, who was appointed by President Barack Obama, wrote that the Education Department failed to clearly show that Congress authorized the repayment plan created by the Biden administration in 2023. He said the economic impact of the program, which the Congressional Budget Office estimates will cost some $230 billion over the next decade, would require congressional input.

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