WASHINGTON (AP) — A federal appeals court has allowed the U.S. Education Department to move ahead with a plan to lower monthly payments for millions of student loan borrowers, putting on hold a ruling last week by a lower court.
The ruling from the 10th U.S. Circuit Court of Appeals puts back on track a central part of President Joe Biden's efforts to address student debt — a rule that lowers from 10% of discretionary income to 5% the amount that some borrowers qualifying for a repayment plan need to pay.
The reduced payment threshold was set to take effect July 1, but federal judges in Kansas and Missouri last week blocked much of the administration’s student loan repayment plan in two separate rulings. The ruling on Sunday means the department can move ahead with the reduced payments already calculated while it pursues an appeal.
The rulings have created a difficult environment for borrowers to navigate, said Persis Yu, deputy executive director of the Student Borrower Protection Center, which advocates for eliminating student debt. The stay granted by the 10th Circuit is temporary, Yu said, leaving many borrowers in the dark about future financial obligations.
“Borrowers are having to make decisions right now about their financial lives, and they don't know the very basic information that they need in order to make informed decisions,” Yu said.
The Biden administration created the SAVE plan last year to replace other existing income-based repayment plans offered by the federal government. It allowed many to qualify for lower payments, and forgiveness was granted to borrowers who had made payments for at least 10 years and originally borrowed $12,000 or less.
U.S. Education Secretary Miguel Cardona said the Biden administrations remains committed "to our work to fix a broken student loan system and make college more affordable for more Americans.”
The appeals court ruling does not impact the injunction issued by a federal judge in Missouri, which prevents the Education Department from forgiving loan balances going forward.
The injunctions are the result of lawsuits from Republican-led states seeking to invalidate the Biden administration's entire loan forgiveness program, which was first available to borrowers in the summer of 2023, and at least 150,000 have had their loans cancelled. The suing states argued that the administration's plan was a workaround after the Supreme Court struck down the original plan for student loan forgiveness earlier that year.
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FILE - President Joe Biden speaks about student loan debt relief at Delaware State University, Oct. 21, 2022, in Dover, Del. A federal appeals court has allowed the U.S. Education Department to move ahead with a plan to lower monthly payments for millions of student loans borrowers. (AP Photo/Evan Vucci, File)
SANTA FE, N.M. (AP) — The state Legislature has endorsed a bill that would raise royalty rates for new petroleum development on prime pieces of land in New Mexico, on one of the world's most prolific oil production areas.
A 37-31 vote on Thursday sent the bill from the Statehouse to Democratic Gov. Michelle Lujan Grisham for consideration.
The proposal would increase the top royalty rate for oil and gas development from 20% to 25% on New Mexico's state trust lands with implications for the energy industry in the Permian Basin, which overlaps southeastern New Mexico and western Texas. The area accounted for 46% of U.S. oil production in 2023, according to the Federal Reserve Bank of Dallas.
New Mexico deposits royalty payments from oil and gas development in a multibillion-dollar investment trust that benefits public schools, universities and hospitals.
“We have a legal duty to maximize the return on these assets,” said Democratic state Rep. Matthew McQueen of Galisteo, a co-sponsor of the bill.
Legislative approval was the culmination of a yearslong effort backed by Public Lands Commissioner Stephanie Garcia Richard to increase top-tier royalty rates. A year ago, Garcia Richard put a hold on lease sales indefinitely for coveted tracts while advocating for the rate increase.
Proponents say neighboring Texas already charges up to 25% on state trust land amid intense competition to drill in the Permian Basin. The royalty changes in neighboring New Mexico would not go into effect in Texas.
Opponents say the rate change threatens to penalize petroleum producers and public beneficiaries, noting that oil production is significantly taxed in other ways and hinges on volatile commodity prices.
In a news release, Garcia Richard said the goal is “to make as much money as possible for school kids and our public institutions.”
“Raising the oil and gas royalty rate on premium state lands was always the right thing to do," she said.
Garcia Richard, a Democrat, terms out of office as land commissioner in 2026 and this week announced her candidacy for lieutenant governor.
New Mexico is the No. 2 state for oil production behind Texas.
Efforts by New Mexico to save and invest portions of a financial windfall from local oil production are paying dividends as state government income on investments is forecast to surpass personal income tax collections.
The state’s land grant permanent fund currently distributes about $1.2 billion a year to beneficiary schools, universities and hospitals as well as the state general fund.
New Mexico state government relies heavily on a financial windfall linked to oil production amid increasing concerns about the connection between climate change and natural disasters including wildfires.
A coalition of environmental groups praised the passage of bills this week that would underwrite local clean energy and environmental sustainability projects and related job training.
But Albuquerque-based attorney Gail Evans of the Center for Biological Diversity vowed to press forward with a lawsuit against the state seeking compliance with the “pollution control clause” in the New Mexico Constitution on behalf of Native Americans who live near oil wells.
“Our legislators didn’t even take the tiny step of ensuring our kids are protected from dangerous oil and gas pollution when they’re at school,” said Evans, alluding to a stalled bill to restrict oil and gas operations within a mile (1.6 kilometers) of school property.
FILE - Pumpjacks are visible before sunrise Monday, Feb. 24, 2025, in Hobbs, N.M. (AP Photo/Julio Cortez, File)
FILE - New Mexico Gov. Michelle Lujan Grisham waves during the Democratic National Convention, Aug. 20, 2024, in Chicago. (AP Photo/Charles Rex Arbogast, File)
FILE - Pumpjacks work in a field near Lovington, N.M., on April 24, 2015. (AP Photo/Charlie Riedel, File)
