White House extends repayment freeze for 8 million student borrowers

Source: msn/CBS News

11h


Federal student loan payments for about 8 million Americans will stay on hold for at least another six months, the U.S. Department of Education confirmed on Monday.

As first reported by CNBC, the decision impacts those enrolled in the White House's "Saving on a Valuable Education," or SAVE, plan, which is temporarily blocked by a federal appeals court. Those who signed up for the plan are excused from their monthly payments and will be put in an interest-free general forbearance, a spokesperson for the agency told CBS MoneyWatch.

The 8 million borrowers in SAVE, and anyone who has applied for the debt relief program, should expect to remain in interest-free forbearance for at least six more months pending the outcome of legal challenges to the SAVE plan according to the agency.

President Joe Biden made helping people saddled with student debt a key plank of 2020 campaign. But his efforts have been stymied by opposition, chiefly from lawmakers in Republican-led states. In 2023, Supreme Court ruled 6-3 against Biden's plan to erase the student debt of more than 40 million people. The U.S. Court of Appeals for the 8th Circuit in June temporarily blocked SAVE, barring the Biden administration from implementing elements of the plan that were not already being challenged by two lower court rulings.

Read more: https://www.msn.com/en-us/news/politics/white-house-extends-repayment-freeze-for-8-million-student-borrowers/ar-AA1sFugk