On April 8, 2024, U.S. President Biden announced a new federal student loan forgiveness program during a visit to the Truax Campus of Madison Regional Technical College in Madison, Wisconsin, USA.
Kevin Lamarque | Reuters
Federal student loan payments for certain individuals 8 million borrowers A spokesman for the U.S. Department of Education said the program will be suspended for six months or more.
Monday’s developments come as the administration is locked in a series of legal battles by Republicans over recent student loan forgiveness efforts.
Borrowers who have their monthly payments forgiven are those participating in the Biden administration’s new SAVE program. A spokesman for the Department of Education said SAVE registrants would be entitled to a general interest-free grace period.
A federal court earlier this year issued an injunction preventing the department from implementing parts of the Valuable Education Savings program. The agency calls SAVE the most affordable repayment plan in history, with many people expected to see their monthly bills cut in half.
Republican attorneys general in Kansas and Missouri are leading legal challenges to SAVE, arguing that the Biden administration is essentially trying to find a roundabout way after the Supreme Court blocked its sweeping debt cancellation plan in June 2023. ways to forgive student debt.
SAVE comes with two key provisions that the lawsuit targets: It has lower monthly payments than any other federal student loan repayment program and it eliminates debt more quickly for people with smaller balances.
Before the legal challenge, the Department of Education had forgiven $5.5 billion in student debt for 414,000 borrowers through the SAVE program.
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