President Joe Biden’s new SAVE plan for student loan forgiveness has been approved to the tune of $613 million in relief for over 54,300 borrowers in recent weeks. The program aims to provide affordable repayment plans and eventual loan forgiveness through a new income-driven repayment program. However, the plan is facing legal challenges from a coalition of 18 Republican-controlled states who are seeking to block the program and halt its benefits.
One major feature of the SAVE plan is fast-tracked student loan forgiveness, allowing borrowers who meet certain criteria to become eligible for forgiveness in only 10 years. Since January, the Biden administration has been approving borrowers for this fast-tracked loan forgiveness in batches, with the latest wave of approvals totaling over $613 million for over 54,000 borrowers. This brings the total loan forgiveness approvals under SAVE to $5.5 billion for 414,000 borrowers since the beginning of the year.
The Biden administration recently scored a partial victory in one of the GOP-led lawsuits challenging the SAVE plan, with a federal court in Kansas partially dismissing the challenge. The judge found that eight of the 11 states lacked standing to sue, while three other states demonstrated potential harm due to the program’s benefits. A ruling is expected soon in another challenge led by a coalition of states including Missouri, with a decision on a preliminary injunction to block SAVE pending in that jurisdiction.
Meanwhile, a federal appeals court upheld the dismissal of a legal challenge to another student loan forgiveness initiative called the IDR Account Adjustment. This program has allowed over a million borrowers to eliminate federal student loan debt by crediting them time towards their repayment term for past periods that previously would not have counted. The decision by the Sixth Circuit Court of Appeals was a significant victory for the Biden administration in the face of legal challenges.
Despite the recent victories, the Biden administration continues to face resistance to its student loan forgiveness plans, with ongoing legal challenges threatening the future of programs like SAVE and the IDR Account Adjustment. Borrowers who have already enrolled in these programs or received loan forgiveness could be impacted by future rulings or appeals in the lawsuits. The administration remains committed to providing relief to struggling student loan borrowers, but the legal battles present obstacles to achieving this goal.
