U.S. President Joe Biden announced a new plan for federal student loan relief during a visit to Madison Area Technical College Truax Campus in Madison, Wisconsin, U.S., on April 8, 2024.
Kevin Lamarque | Reuters
A spokesperson for the U.S. Department of Education stated that federal student loan payments for around 8 million borrowers will continue to be paused for six months or more.
This decision comes as the Biden administration faces legal challenges from Republicans regarding its recent student loan relief initiatives.
The borrowers who will not have to make monthly payments are those participating in the Biden administration’s new SAVE plan. These enrollees will be placed in an interest-free general forbearance, according to the Education Department spokesperson.
Earlier this year, a federal court issued an injunction preventing the department from implementing certain aspects of the Saving on a Valuable Education plan. The SAVE plan was promoted as the most cost-effective repayment plan in history, with many individuals expected to see their monthly bills reduced by half.
Republican attorneys general in Kansas and Missouri, who spearheaded the legal challenges against SAVE, argue that President Joe Biden is attempting to indirectly forgive student debt after the Supreme Court blocked its broad debt cancellation plan in June 2023.
SAVE includes two main provisions that have been the focus of lawsuits: it offers lower monthly payments compared to any other federal student loan repayment plan, and it results in quicker debt elimination for those with small balances.
Prior to the legal disputes, the Education Department had already forgiven $5.5 billion in student debt for 414,000 borrowers through the SAVE Plan.
This is a developing story. Please check back for updates.