A significant legal battle has erupted in the U.S. as the American Federation of Teachers (AFT) has filed a lawsuit against the Department of Education, alleging that the Trump administration has unlawfully halted access to income-driven repayment plans for student loans. This move affects millions of borrowers who rely on these plans to manage their debt.
The controversy began after a federal appeals court ruled that the Biden administration lacked the authority to implement the Saving on a Valuable Education (SAVE) Plan, a program designed to reduce monthly payments for borrowers and expedite loan forgiveness.
The SAVE Plan, introduced during the Biden era, offered more favorable terms than previous income-based repayment plans, allowing some borrowers to have their monthly payments reduced to as low as $0 and providing debt forgiveness for smaller loans in as few as ten years.
The AFT lawsuit, filed in federal court in Washington, targets the Education Department’s decision to suspend enrollment in all income-driven repayment plans following the court ruling. The union argues that this decision was overly broad and illegal, as the court’s ruling did not explicitly bar other types of income-driven repayment plans.
AFT President Randi Weingarten criticized the move, stating that it “effectively freezes the nation’s student loan system,” making life harder for millions of borrowers who have taken on debt to pursue higher education.
In response to the lawsuit, an Education Department spokesperson indicated that the department is working to ensure compliance with the court’s decision and anticipates making revised forms available soon. However, critics argue that the department’s actions have gone too far, affecting programs that were not directly challenged by the court ruling.
The situation highlights ongoing tensions over student loan policies, with the Trump administration facing criticism for its handling of the issue.
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