The Supreme Court denied a request from the Biden administration to lift a block on the SAVE student loan repayment plan, which aims to reduce monthly payments and expedite loan forgiveness. This decision has no immediate impact on the 8 million borrowers currently enrolled in the program, as they have been placed in an interest-free forbearance by the Department of Education. The fate of the plan, which is estimated to cost $276 billion, remains uncertain as courts review legal challenges from GOP-led states.
Despite being a key component of Biden’s 2020 presidential campaign, student loan forgiveness has faced numerous setbacks, including a ruling last year where the court ruled Biden had exceeded his authority by attempting to forgive large amounts of student debt. The SAVE plan is one of the administration’s most significant student loan policies and offers low-income borrowers lower monthly payments and a faster path to loan forgiveness than other repayment plans. This plan is based on a different law than the one at issue in the previous ruling.
The Supreme Court expects the 8th US Circuit Court of Appeals to decide on the challenge to the SAVE plan promptly, indicating that it wants the legal proceedings to unfold in the lower court first. Last month, Alaska, South Carolina, and Texas asked the high court to maintain a partial block on the program while their larger legal challenge proceeds. The high court declined this request as well, further adding to the uncertainty surrounding the fate of the plan.
The Department of Education implemented the SAVE plan last year after the Supreme Court rejected Biden’s more comprehensive student loan forgiveness program. The plan allows eligible borrowers to make lower monthly payments, reduces the percentage of discretionary income required for payments, and shortens the repayment period for certain borrowers with smaller loans. The plan aims to provide relief to borrowers struggling with student loan debt and offers a more generous repayment option than previous plans.
The White House, Department of Justice, and Department of Education have not commented on the Supreme Court’s decision. Borrowers enrolled in the program can find updated information on the agency’s website. The SAVE plan remains in limbo as courts continue to review legal challenges, leaving the future of this significant student loan repayment initiative uncertain. The Supreme Court’s denial of the request to lift the block on the program underscores the ongoing legal battles surrounding student loan forgiveness and repayment policies.
