Education Secretary Miguel Cardona condemned an appeals court's recent decision to again block the Biden administration's student loan repayment plan, calling it a politically motivated obstacle to essential relief for borrowers.
The 8th U.S. Circuit Court of Appeals' ruling on Friday extends a temporary halt on the SAVE plan, preventing its implementation until the court resolves ongoing litigation. The court's 3-0 decision labeled the plan as a "vast assertion of newfound power" and criticized the administration for lacking clear congressional authorization.
Cardona argued that the ruling, if upheld, would force millions of borrowers to pay significantly more each month and potentially deny loan forgiveness to those who have made faithful repayments over up to 25 years. He decried the decision as an attack on a 30-year practice of providing loan forgiveness and vowed to continue defending the Saving on a Valuable Education (SAVE) plan in court.
In July, the court granted an emergency motion brought forward by several Republican-led states to temporarily block parts of the SAVE plan that hadn't been blocked by a lower court judge.
"It's shameful that politically motivated lawsuits waged by Republican elected officials are once again standing in the way of lower payments for millions of borrowers," Cardona said in a Monday statement.
The SAVE plan, which aims to restructure repayment terms for student borrowers, was introduced after the Supreme Court struck down a previous universal debt relief program. It was designed in two phases: the first, effective last fall, increased the income threshold for protected payments and waived accrued unpaid interest; the second, set for July, would have reduced the income repayment percentage and expanded forgiveness options.
Cardona promised that borrowers affected by the ruling would be placed in an interest-free forbearance while the administration fights the legal challenge.
"It wasn't so long ago that a million borrowers defaulted on their student loans every single year, mainly because they couldn't afford the payments. The SAVE plan is a clearly authorized and urgently needed effort to fix what's broken in our student loan system and make financing a higher education more affordable in this country," he said.
