A coalition of Republican-led states has filed a lawsuit seeking to block President Joe Biden’s new student loan forgiveness initiative, known as the SAVE plan. This plan offers income-driven repayment options and student loan forgiveness after 20 or 25 years. The states, led by Kansas, are particularly opposed to the provision allowing borrowers with small loan amounts to qualify for forgiveness in as little as 10 years. Over 150,000 borrowers have been approved for relief under this feature, prompting the lawsuit.
The lawsuit challenges the entire SAVE program, potentially jeopardizing lower monthly payments for the 7 million borrowers already enrolled. The legal issues in this case differ from the previous challenge to Biden’s student loan forgiveness plan, as the SAVE plan was established through normal rulemaking procedures under the Higher Education Act. The Supreme Court previously struck down Biden’s initial plan as executive overreach, citing the Major Questions Doctrine, which invites scrutiny for policy decisions with significant ramifications.
The scope of student loan forgiveness under the SAVE plan is much smaller than Biden’s first plan, estimated at $1.2 billion compared to $430 billion. Despite the legal challenge, the Biden administration continues to develop new student loan forgiveness initiatives under different legal authorities. Biden remains committed to addressing issues with broken student loan programs and providing relief to borrowers facing financial difficulties. The administration recently announced nearly 80,000 borrowers receiving $6 billion in relief through the Public Service Loan Forgiveness program.
While the Biden administration has not yet responded to the lawsuit, officials have defended the SAVE plan as the most affordable repayment option available. The coalition of states argues that the plan will result in the forgiveness of billions of dollars in student debt through what they claim is a system of federal grants. The legal battle over student loan forgiveness continues, with both sides presenting arguments in court and seeking resolution on the legality of the Biden administration’s efforts to provide relief to borrowers.
President Biden has emphasized his commitment to addressing the student loan crisis and providing support to borrowers in need. While the legal challenges to his student loan forgiveness plans continue, the administration remains focused on expanding relief programs and offering assistance to those struggling to repay their loans. The outcome of this latest lawsuit will have implications for millions of borrowers enrolled in the SAVE program and highlight the ongoing debate over the legality and effectiveness of student loan forgiveness initiatives under the Biden administration.
