A federal appeals court has allowed the U.S. Education Department to move ahead with a plan to lower monthly payments for millions of student loan borrowers, putting on hold a ruling last week by a lower court. The ruling from the 10th U.S. Circuit Court of Appeals puts back on track a central part of President Biden's efforts to address student debt — a rule that lowers from 10% of discretionary income to 5% the amount that some borrowers qualifying for a repayment plan need to pay.
The stay granted by the 10th Circuit is temporary and subject to appeal, Yu said, leaving many borrowers in the dark about future financial obligations. “Borrowers are having to make decisions right now about their financial lives, and they don't know the very basic information that they need in order to make informed decisions,” Yu said. The Biden administration created the SAVE plan last year to replace other existing income-based repayment plans offered by the federal government.