JUNE 25, 2024:
TOPEKA, Kan. (AP) — Federal judges in Kansas and Missouri on Monday (June 24, 2024) together blocked much of a Biden administration student loan repayment plan that provides a faster path to cancellation and lower monthly payments for millions of borrowers.
The judges’ rulings prevent the U.S. Department of Education from helping many of the intended borrowers ease their loan repayment burdens going forward under a rule set to go into effect July 1. The decisions do not cancel assistance already provided to borrowers.
In Kansas, U.S. District Judge Daniel Crabtree ruled in a lawsuit filed by the state’s attorney general, Kris Kobach, on behalf of his state and 10 others. In his ruling, Crabtree allowed parts of the program that allow students who borrowed $12,000 or less to have the rest of their loans forgiven if they make 10 years’ worth of payments, instead of the standard 25.
But Crabtree said that the Department of Education won’t be allowed to implement parts of the program meant to help students who had larger loans and could have their monthly payments lowered and their required payment period reduced from 25 years to 20 years.
In Missouri, U.S. District Judge John Ross’ order applies to different parts of the program than Crabtree’s. His order says that the U.S. Department of Education cannot forgive loan balances going forward. He said the department still could lower monthly payments.
Ross issued a ruling in a lawsuit filed by Missouri Attorney General Andrew Bailey on behalf of his state and six others.
Together, the two rulings, each by a judge appointed by former President Barack Obama, a Democrat, appeared to greatly limit the scope of the Biden administration’s efforts to help borrowers after the U.S. Supreme Court last year rejected the Democratic president’s first attempt at a forgiveness plan. Both judges said Education Secretary Miguel Cardona exceeded the authority granted by Congress in laws dealing with students loans.
Bailey and Kobach each hailed the decision from their state’s judge as a major legal victory against the Biden administration and argue, as many Republicans do, that forgiving some students’ loans shifts the cost of repaying them to taxpayers.
“Only Congress has the power of the purse, not the President,” Bailey said in a statement. “Today’s ruling was a huge win for the rule of law, and for every American who Joe Biden was about to force to pay off someone else’s debt.”
The White House said it strongly disagrees with the judges’ rulings and would continue to defend the program, and use every available tool to give relief to students and borrowers.
In a statement, White House press secretary Karine Jean-Pierre said the Biden administration “will never stop fighting for students and borrowers — no matter how many roadblocks Republican elected officials and special interests put in our way.”
In a statement posted on the social media platform X, leaders of the Student Borrower Protection Center, which advocates for eliminating student debt, called the decisions “partisan lawfare” and “a recipe for chaos across the student loan system.”
“Millions of borrowers are now in limbo as they struggle to make sense of their rights under the law and the information being provided by the government and their student loan companies,” said the group’s executive director, Mike Pierce.
In both lawsuits, the suing states sought to invalidate the entire program, which the Biden administration first made available to borrowers in July 2023, and at least 150,000 have had their loans canceled. But the judges noted that the lawsuits weren’t filed until late March in Kansas and early April in Missouri.
“So the court doesn’t see how plaintiffs can complain of irreparable harm from them,” Crabtree wrote in his opinion.
Both orders are preliminary, meaning the injunctions imposed by the judges would remain in effect through a trial of the separate lawsuits. However, to issue a temporary order each judge had to conclude that the states were likely to prevail in a trial.
Kobach framed the Biden plan as “unconstitutional” and an affront to “blue collar Kansas workers who didn’t go to college.”
There was some irony in Crabtree’s decision: Kansas is no longer a party to the lawsuit Kobach filed. Earlier this month, Crabtree ruled that Kansas and seven other states in the lawsuit — Alabama, Idaho, Iowa, Louisiana, Montana, Nebraska and Utah — couldn’t show that they’d been harmed by the new program and dismissed them as plaintiffs.
That left Alaska, South Carolina and Texas, and Crabtree said they could sue because each has a state agency that services student loans.
But Crabtree said that lowering monthly payments and shortening the period of required payments to earn loan forgiveness “overreach any generosity Congress has authorized before.”
In the Missouri ruling, Ross said repayment schedules and “are well within the wheelhouse” of the department but the “plain text” of U.S. law doesn’t give it authority to forgive loans before 25 years of payments.
Missouri also has an agency that services student loans. The other states in its lawsuit are Arkansas, Florida, Georgia, North Dakota, Ohio and Oklahoma.
JUNE 12, 2024:
Extended version:
MAY 22, 2024:
The Biden-Harris Administration announced (May 21, 2024) the approval of $7.7 billion in additional student loan debt relief for 160,500 borrowers. These discharges are for three categories of borrowers: those receiving Public Service Loan Forgiveness (PSLF); those who signed up for President Biden’s Saving on a Valuable Education (SAVE) Plan and who are eligible for its shortened time-to-forgiveness benefit; and those receiving forgiveness on income-driven repayment (IDR) as a result of fixes made by the Administration. This action comes as more than 8 million borrowers have been helped by the SAVE Plan. That includes 4.6 million with a $0 monthly payment.
The announcement brings the total loan forgiveness approved by the Biden-Harris Administration to $167 billion for 4.75 million Americans. Thanks to this Administration’s efforts more than one out of every 10 federal student loan borrowers has now been approved for some debt relief. This action builds on President Biden and his Administration’s efforts to provide debt relief to as many borrowers as possible as quickly as possible.
“The Biden-Harris Administration remains persistent about our efforts to bring student debt relief to millions more across the country, and this announcement proves it,” said U.S. Secretary of Education Miguel Cardona. “One out of every 10 federal student loan borrowers approved for debt relief means one out of every 10 borrowers now has financial breathing room and a burden lifted.”
Recently, the U.S. Department of Education (Department) also announced an update on the timing of the payment count adjustment. This administrative fix ensures borrowers get credit for progress borrowers made toward IDR forgiveness and PSLF. Borrowers who would benefit from consolidating now have until June 30, 2024 to apply to consolidate. Borrowers can find out more about the payment count adjustment here.
The debt relief announced today is broken down into the following categories:
- $5.2 billion for 66,900 borrowers through fixes to PSLF: The Administration has now approved $68 billion in forgiveness for more than 942,000 borrowers through PSLF.
- $613 million for 54,300 borrowers through the SAVE Plan: This relief will go to borrowers enrolled in the SAVE Plan who had smaller loans for their postsecondary studies. Borrowers can receive relief after at least 10 years of payments if they originally borrowed $12,000 or less. Each additional $1,000 in borrowing adds 12 more months until forgiveness. All borrowers on the SAVE Plan receive forgiveness after 20 or 25 years, depending on whether they have loans for graduate school. The benefit is based upon the original principal balance of all Federal loans borrowed to attend school, not what a borrower currently owes or the amount of an individual loan. Today’s announcement brings total relief approved under the SAVE Plan to $5.5 billion for 414,000 borrowers.
- $1.9 billion for 39,200 borrowers through administrative adjustments to IDR payment counts. These adjustments have brought borrowers closer to forgiveness and address longstanding concerns with the misuse of forbearance by loan servicers. Including today’s announcement, the Biden-Harris Administration has now approved $51.0 billion in IDR relief for more than 1 million borrowers.
“Another 160,000 borrowers and their families will get some much-needed relief thanks to the continued efforts the Biden-Harris Administration to fix the broken student loan system,” said U.S. Under Secretary of Education James Kvaal. “We congratulate those borrowers on their due forgiveness and we will continue to work to deliver relief to others.”
As discussed in a recent report by the Council of Economic Advisers, the relief provided by these discharges and other actions taken by the Administration could boost short-term consumption and have positive effects on borrower mental health, financial security, and outcomes such as homeownership and entrepreneurship.
Borrowers have already begun receiving emails informing them of their approvals. Their relief will be processed in the following weeks.
New Plans to Deliver Debt Relief to Tens of Millions of Americans
In April, the Biden-Harris Administration released initial details of a new set of plans that would provide student debt relief for tens of millions of borrowers across the country. The plans would bring the total number of borrowers eligible for student debt relief to over 30 million, including borrowers who have already been approved for debt cancellation by the Biden-Harris Administration over the past three years. The plans for new student debt relief regulations announced by President Biden are the next step in a regulatory process that began last summer to provide debt relief to as many borrowers as possible as quickly as possible under the Higher Education Act. The proposals would permit the following types of waivers:
- Waiving accrued and capitalized interest for millions of borrowers;
- Automatically discharging debt for borrowers not enrolled in but otherwise eligible for loan forgiveness under the SAVE Plan, closed school discharge, or other forgiveness programs;
- Eliminating student debt for borrowers who entered repayment 20 or more years ago;
- Helping borrowers who enrolled in low-financial-value programs or institutions; and
- Assisting borrowers who experience hardship in paying.
Public comments on the first set of plans closed on May 17. The Department is in the process of carefully reviewing comments. Our goal is to publish a final rule that results in delivering relief this fall.
A Strong Track Record of Borrower Assistance
The Biden-Harris Administration has taken many steps to reduce the burden of student debt and ensure that student loans are not a barrier to opportunity for students and families. The Administration secured a $900 increase to the maximum Pell Grant — the largest increase in a decade — and finalized new rules to protect borrowers from career programs that leave graduates with unaffordable debts or insufficient earnings.
Beyond the relief under IDR, the SAVE Plan, and PSLF, the Biden-Harris Administration has also approved:
- $28.7 billion for more than 1.6 million borrowers who were cheated by their schools, saw their institutions precipitously close, or are covered by related court settlements.
- $14.1 billion for more than 548,000 borrowers with a total and permanent disability.
The updated state-by-state breakdown of borrowers approved for forgiveness under IDR and the SAVE Plan, including today’s announcement, can be found here.
APRIL 12, 2024:
Extended version:
FEBRUARY 23, 2024:
Nearly 153,000 borrowers are receiving $1.2 billion in forgiveness under President Joe Biden’s Saving on a Valuable Education–SAVE– Plan.
For a borrower to be eligible for this forgiveness they must be enrolled in the SAVE Plan, have been making at least 10 years of payments, and have originally taken out $12,000 or less for college. For every $1,000 borrowed above $12,000, a borrower can receive forgiveness after an additional year of payments. All borrowers on SAVE receive forgiveness after 20 or 25 years, depending on whether they have loans for graduate school. The benefit is based upon the original principal balance of all Federal loans borrowed as a student to attend school, not what a borrower currently owes or the amount of an individual loan.
A state-by-state breakdown released Friday (Feb. 23, 2024) shows 270 borrowers in South Dakota are being forgiven a combined debt of $1.9 million. In other surrounding states:
- Wyoming– 150 borrowers totaling $1.0 million
- North Dakota– 220 borrowers totaling $1.6 million
- Montana– 300 borrowers totaling $2.2 million
- Nebraska– 750 borrowers totaling $5.3 million
- Minnesota– 2,060 borrowers totaling $14.5 million
- Iowa– 2,120 borrowers totaling $17.3 million
Borrowers can learn more about forgiveness programs at StudentAid.gov/forgiveness.
Borrowers can learn more about the right repayment plan for their financial situation at StudentAid.gov/restart.
More information about the SAVE plan is available at StudentAid.gov/save.
The state-by-state breakdown of borrowers approved for forgiveness under SAVE is below:
State |
Borrower Count |
Amount Forgiven (in millions) |
Alabama |
2,550 |
$20.8 |
Alaska |
190 |
$1.4 |
Arizona |
3,990 |
$33.0 |
Arkansas |
1,190 |
$8.7 |
California |
13,580 |
$114.8 |
Colorado |
2,530 |
$19.8 |
Connecticut |
1,600 |
$13.7 |
Delaware |
650 |
$5.3 |
District of Columbia |
350 |
$2.9 |
Florida |
12,790 |
$105.4 |
Georgia |
6,050 |
$49.7 |
Hawaii |
280 |
$1.9 |
Idaho |
1,130 |
$9.2 |
Illinois |
5,560 |
$43.8 |
Indiana |
3,330 |
$26.0 |
Iowa |
2,120 |
$17.3 |
Kansas |
1,270 |
$9.9 |
Kentucky |
2,110 |
$16.1 |
Louisiana |
2,160 |
$16.3 |
Maine |
700 |
$5.3 |
Maryland |
2,680 |
$22.7 |
Massachusetts |
2,490 |
$19.5 |
Michigan |
6,040 |
$47.0 |
Minnesota |
2,060 |
$14.5 |
Mississippi |
1,790 |
$13.3 |
Missouri |
2,780 |
$22.4 |
Montana |
300 |
$2.2 |
Nebraska |
750 |
$5.3 |
Nevada |
1,650 |
$13.9 |
New Hampshire |
490 |
$3.6 |
New Jersey |
4,180 |
$35.3 |
New Mexico |
860 |
$6.8 |
New York |
8,190 |
$63.4 |
North Carolina |
4,170 |
$33.3 |
North Dakota |
220 |
$1.6 |
Ohio |
7,540 |
$60.0 |
Oklahoma |
1,690 |
$12.9 |
Oregon |
2,220 |
$17.4 |
Pennsylvania |
5,600 |
$45.1 |
Puerto Rico |
1,060 |
$6.1 |
Rhode Island |
450 |
$3.4 |
South Carolina |
2,520 |
$20.6 |
South Dakota |
270 |
$1.9 |
Tennessee |
3,340 |
$25.7 |
Texas |
14,510 |
$116.6 |
Utah |
850 |
$5.8 |
Vermont |
190 |
$1.3 |
Virginia |
3,040 |
$24.6 |
Washington |
2,630 |
$20.1 |
West Virginia |
1,070 |
$8.8 |
Wisconsin |
1,990 |
$13.8 |
Wyoming |
150 |
$1.0 |
All Other Locations |
990 |
$7.4 |
Total |
152,880 |
$1,218.1 |
Data as of Mid-February 2024 | ||
The sum of individual values may not equal the total due to rounding. |
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