Biden scholar mortgage cost pause prolonged for SAVE debtors

Federal student loan payments for some 8 million borrowers will remain on pause for six months or longer, a spokesperson for the U.S. Department of Education said. 

The development on Monday comes as the Biden administration has been dragged into a slew of legal battles waged by Republicans over its recent student loan relief efforts. 

The borrowers who are excused from their monthly payments are those enrolled in the Biden administration’s new SAVE plan. SAVE enrollees will be placed in an interest-free general forbearance, the Education Department spokesperson said.

A federal court issued an injunction earlier this year preventing the department from implementing parts of the Saving on a Valuable Education plan. The agency had billed SAVE as the most affordable repayment plan in history, and many people were expected to see their monthly bills cut in half. 

Republican attorneys general in Kansas and Missouri, who led the legal challenges against SAVE, argue that President Joe Biden is essentially trying to find a roundabout way to forgive student debt after the Supreme Court blocked its sweeping debt cancellation plan in June 2023.

SAVE comes with two key provisions that lawsuits have targeted: It has lower monthly payments than any other federal student loan repayment plan, and it leads to quicker debt erasure for those with small balances.

Before the legal challenges, the Education Department had already forgiven $5.5 billion in student debt for 414,000 borrowers through the SAVE Plan.

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