US Judges Block Trump Student Loan Forgiveness Rule
Two US judges blocked a Trump rule on student loan forgiveness. The rule would have let the Education Department remove employers from a forgiveness program.
Those employers would have been labeled as having an illegal purpose. The program is called Public Service Loan Forgiveness.
Over 1 million borrowers have already received relief under it. This block is separate from Trump's broader student loan changes.
Those changes took effect on July 1. Meanwhile over 7 million Americans must now change their repayment plan.
This started Wednesday as the Biden-era Save plan officially ended. A court ruled the Save plan was unconstitutional.
Borrowers have 90 days to pick a new repayment option. A new plan called the Repayment Assistance Plan is replacing Save.
It was introduced under Trump's 'One Big Beautiful Bill.' It caps payments at 1 to 10% of income. Forgiveness comes after 30 years. Borrowers switching from Save will likely pay more each month.
Key Terms 4
- Public Service Loan Forgiveness US program that cancels student debt for public sector workers
- Save plan Biden's 2023 student loan repayment scheme, now ruled unconstitutional
- Repayment Assistance Plan New Trump-era plan capping loan payments at 1 to 10% of income
- One Big Beautiful Bill Trump's wide-ranging new law covering taxes and student loans