Professional Liability

A federal court in Missouri has blocked President Biden’s latest attempt to forgive nearly $500 billion in federal loans. U.S. District Court Judge John Ross issued a temporary injunction halting part of the Department of Education’s rule that creates a new repayment option, the Savings on Valuable Education Plan. The injunction was issued after Judge Ross determined that the new repayment option exceeds the scope of authority held by Education Secretary, Miguel Cardona. 

In his opinion, Judge Ross reasoned, “Because the Plaintiffs have shown that Missouri faces impending harm from any additional loan forgiveness under the Final Rule, the Court finds it necessary to enjoin Defendants from any further implementation of the Final Rule’s loan forgiveness provisions until this matter can be fully litigated.” His order further states that the U.S. Department of Education cannot forgive loan balances going forward, but it could still lower monthly payments. This injunction, issued on June 24, 2024, will prevent the plan from taking effect on July 1st. 

A federal judge in Kansas issued a similar ruling that will block a portion of the new repayment plan. U.S. District Judge Daniel Crabtree presided over a lawsuit filed by the state's attorney general, Kris Kobach, on behalf of his state and six others. In his ruling, Judge Crabtree allowed parts of the program that allow students who borrowed $12,000 or less to have the rest of their loans forgiven if they make ten years' worth of payments, instead of the standard 25 years. He further explained, however, that the Department of Education won't be allowed to implement parts of the program meant to help students who had larger loans and could have their monthly payments lowered and their required payment period reduced from 25 years to 20 years. 

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^{Legal Update for Special Education Law – July 2024 is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2024 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.}