New Lawsuit Demands Department Of Education Forgive Student Loans Under Key Repayment Plan

The lawsuit stems from an ongoing battle between student loan borrowers and Republican-led states.

Student loan borrowers are demanding that the Education Department start forgiving student loans and offer affordable monthly payments under the income-driven repayment plan. In a new lawsuit filed on behalf of student loan borrowers, lawyers are accusing the federal government of refusing to follow the law. The lawsuit stems from an ongoing battle between student loan borrowers and some states.

The SAVE Plan is an income-driven repayment program that lowers monthly payments for borrowers and prevents unpaid interest from causing loan balances to balloon. According to the Student Debt Crisis Center (SDCC), income-driven repayment plans are designed to ensure that student loan repayment remains affordable.

However, SAVE Plans have been blocked for more than a year and a half due to legal challenges brought on by Republican-led states. But in February, a federal district court in Missouri dismissed the main lawsuit against the SAVE plan and refused to reconsider or pause that ruling, according to Forbes.

Student Loan Borrowers, Advocates Demand Access To Affordable Repayments

In the days following the dismissal, borrowers reached out to the Education Department to request SAVE Plan benefits. Student loan borrowers and advocates argue that the SAVE Plan is no longer blocked and the Education Department has a legal obligation to reopen the plans.

“Millions of borrowers have already waited years for repayment terms that the law requires,” said Austin Hinkle, Managing Partner of Public Goods Practice, the law firm representing student loan borrowers, in a statement. “Today, they are eligible to have their loans cancelled, but the government simply refuses to do it.”

As SDCC pointed out, the difference between SAVE and other repayment programs can amount to thousands of dollars in additional costs each year and additional years of repayment. SDCC leaders said the Trump administration is giving borrowers the “run around” and denying access to the “most affordable payment plan in history.”

“The number one question we receive during our student loan workshops is what borrowers should do if they are enrolled in the SAVE program,” said Natalia Abrams, President and Founder of the Student Debt Crisis Center. “Today, these borrowers remain in prolonged uncertainty due to nearly two years of administrative forbearance.”