A judge has blocked part of a Biden era policy to forgive student loans.

The multi-state lawsuit was brought on by seven states including Arkansas, represented by Attorney General Tim Griffin. The suit was against President Joe Biden, Secretary of Education Miguel Cardona and the Department of Education.

The Savings on Valuable Education or “SAVE” plan changes the income threshold for paying back student loans. The plan also forgives loan borrowers after 120 payments if their balances are below $12,000. U.S. District Judge John Ross blocked that part of the law relating to loan forgiveness. It was set to take effect on July 1, and would have amounted to billions in loan forgiveness.

Judge blocks part of SAVE loan forgiveness plans after Arkansas sues

*Susan Haejin Lee/NPR*
Billions in student debt will not be forgiven after a judge blocked parts of the SAVE plan from going into effect.

KUAR | By Antoinette Grajeda / Arkansas Advocate

With student loan payments resuming in October after a three-year pandemic pause, Karen Sykes of Little Rock said she’s relieved by the creation of a new federal program that will significantly lower her payments and set an end date for settling her debt.

“There’s that light at the end of the tunnel,” she said.

Sykes is one of more than 38,000 Arkansans enrolled in the new Saving on A Valuable Education (SAVE) plan, an income-driven repayment program that calculates payments based on a borrower’s income and family size and forgives balances after a set number of years. The U.S. Department of Education estimates that most borrowers will save about $1,000 per year through the program.

Arkansans seek assistance from federal program as student loan payments resume (ualrpublicradio.org)