The 10th Circuit U.S. Court of Appeals, in a ruling on Sunday, acceded to the Biden administration's plea to suspend an order from the previous week that had temporarily halted a section of the SAVE plan.
This decision is seen as a significant victory for Biden, according to experts. The SAVE plan, which has been hailed as his most substantial achievement in providing relief to student loan borrowers, has already attracted approximately 8 million borrowers to sign up for the new income-driven repayment plan, as reported by CNBC.
The legal tussle began last week when a federal judge in Kansas issued an injunction to prevent the Biden administration from reducing borrowers' monthly payments under the SAVE plan. The Department of Justice swiftly lodged an appeal against this decision.
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The recent ruling by the appeals court will enable the Biden administration to proceed with its plan to decrease borrowers' monthly payments. The SAVE plan allows many borrowers to contribute just 5% of their discretionary income towards their debt each month. Furthermore, individuals earning $32,800 or less are required to make a $0 monthly payment. This is a stark contrast to other income-driven repayment plans, where borrowers are required to pay 10% or more of their discretionary income.
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However, a second injunction against the SAVE plan, issued last week by a federal judge in Missouri, continues to be in effect. This injunction prevents the Biden administration from forgiving student debt under the plan. The Justice Department is anticipated to challenge this decision as well. Despite these legal hurdles, the Biden administration remains committed to providing relief to student loan borrowers.
