An appeals court has allowed Joe Biden's student loan plan to go ahead, handing him a small victory to tout on the campaign trail as Democrats question his political future.
The whiplash ruling came only days after two federal judges blocked aspects of Biden's plan, called SAVE. The income-based repayment plan lowers monthly payments for borrowers depending on income level, with the poorest paying as little as $0.
This is the second time Biden has tried to fulfill a 2020 campaign promise to forgive student loans. His first effort was blocked by the Supreme Court last summer.
The Biden administration has touted SAVE as the most affordable income-driven repayment plan ever.
The plan allows borrowers with loans smaller than $12,000 to have their loans forgiven after 10 years of payments, a faster timeline than the 20 to 25 years that income-based plans typically require. SAVE also reduces payments to 5% of discretionary income for the majority of borrowers.
Last week, a pair of federal judges in Missouri and Kansas blocked aspects of SAVE in response to Republican challenges.
As a result, a scheduled reduction in payments from 10% of discretionary income to 5% was blocked.
After last week's court rulings, the Biden administration oddly blamed Republicans even though both judges were Obama appointees.
The administration appealed, and the U.S. Court of Appeals for the 10th Circuit reversed, allowing the payment reduction that was scheduled for July 1 to go ahead.
On the other hand, Biden still can't use SAVE to forgive loans. Still, Education Secretary Miguel Cardona was eager to tout a victory.
“Yesterday, the U.S. Court of Appeals for the Tenth Circuit sided with student loan borrowers across the country who stand to benefit from the SAVE Plan – the most affordable repayment plan in history,” Cardona said.
“Borrowers will hear directly from their loan servicers and the Department as we implement the new, lower monthly payments for borrowers enrolled in SAVE,” Cardona said.
Republicans have criticized Biden's student loan efforts as a cynical attempt to bribe voters and transfer wealth from non-college voters to degree holders who are more likely to support Democrats.
The latest development on student loans comes as Biden faces a full-blown political crisis, with Democrats questioning his future following his poor debate performance last week.
