Why student loan payments are paused for 3 million borrowers
CNN
The Department of Education is pausing student loan payments for roughly 3 million borrowers who were expecting to have lower monthly bills starting July 1.
The Department of Education is pausing student loan payments for roughly 3 million borrowers who were expecting to have lower monthly bills starting July 1. The pause comes after two federal courts temporarily blocked parts of a student loan repayment plan known as SAVE (Saving on a Valuable Education), launched by President Joe Biden last year. Two groups of Republican-led states filed lawsuits earlier this year challenging the SAVE plan, arguing that the administration does not have the legal authority to implement the plan. Missouri and Kansas judges issued temporary injunctions last week, halting parts of the SAVE plan while the matter can be fully litigated. SAVE lowers enrolled borrowers’ monthly payments and provides a faster route to debt forgiveness. It was launched by the Biden administration after the president’s sweeping, one-time student loan forgiveness program was struck down by the Supreme Court last summer. As a result of the court-ordered injunctions, the Biden administration is blocked from lowering payments by as much as half for some borrowers enrolled in SAVE. That part of the repayment plan was scheduled to be phased in this month. The administration is also not allowed to cancel any more student loan debt under the SAVE plan for now. The Department of Justice has appealed both injunctions. Here’s what borrowers need to know:
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