Federal appeals court lets U.S.Education Department go ahead with student loan repayment plan despite legal issues.
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A court said the U.S. Education Department can lower monthly payments for student loan borrowers. This reverses a decision from a lower court and helps President Biden's plan to help people with student debt.
The plan lowers the amount some borrowers have to pay from 10% of their income to 5%. It was supposed to start on July 1st, but judges in Kansas and Missouri stopped it.
This new decision means the lower payments can happen while the case continues in court. However, it's temporary, so people don't know what their payments will be in the future.
The Biden administration made a new plan called SAVE to replace old payment plans. It helps more people pay less each month and forgives loans for some people after 10 years.
Some states sued to stop the loan forgiveness plan, and a judge in Missouri agreed. The states said the plan was not legal after the Supreme Court rejected a different loan forgiveness plan.
Questions
What did a court say about the U.S. Education Department's ability to lower monthly payments for student loan borrowers?
The court said the U.S. Education Department can lower monthly payments for student loan borrowers.
What was the reason for the delay in implementing the plan to lower student loan payments from 10% to 5% of income?
Judges in Kansas and Missouri stopped the plan from starting on July 1st.
What is the status of the lower payments for student loans while the case continues in court?
The lower payments can happen temporarily while the case continues in court, but it's uncertain what future payments will be.
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