CAN THE COURTS RESCUE SAVE? Legal Challenges Derail Debt Repayment Plan
As controversial government initiatives go, few White House actions have faced more scrutiny than the Saving on a Valuable Education (SAVE) Plan. The hotly debated design for student loan relief has long struggled to gain momentum due to legal challenges and political standoffs. Announced in July 2023 and touted by the Biden-Harris Administration as “the most affordable student loan repayment plan ever,” the SAVE Plan initially aimed to reduce undergraduate loan payments by 50%, prevent balances from growing due to unpaid interest, drop millions of monthly payments to $0, and expedite the repayment process for low-income borrowers. Addressing student debt had been a major focus of President Biden’s tenure. “The cost of education beyond high school has gone up significantly,” he noted in 2022. “The total cost to attend a public four-year university has nearly tripled in 40 years [...] An entire generation is now saddled with unsustainable debt in exchange for an attempt, at least, at a college degree. The burden is so heavy that even if you graduate, you may not have access to the middle-class life that the college degree once provided.” The White House’s efforts to address the debt repayment crisis faced considerable opposition throughout 2024,
“The SAVE Plan initially aimed to reduce undergraduate loan payments by 50%, prevent balances from growing due to unpaid interest, drop millions of monthly payments to $0, and expedite the repayment process for low-income borrowers.”
including an injunction by the 8th Circuit Court of Appeals to prevent them from proceeding — a move subsequently upheld by the Supreme Court. Forbes predicts that the fallout from these and other challenges will tie up the matter in courts well into 2025. In light of this potentially lengthy legal tug-of-war, payers already enrolled in the SAVE Plan have been granted forbearance until the matter is resolved. Interest will not accrue during this period, and any interim payments the borrower makes will be applied to future bills. Despite the delays and derision surrounding the plan, the current administration has steadfastly maintained its position. In an interview with CBS earlier this year, Education Secretary Miguel Cardona stressed that “student debt shouldn’t be a life sentence.” Conversely, Republican Senator Bill Cassidy of Louisiana has called the SAVE Plan a “scheme” that “only shifts the burden from those who chose to take out loans to those who decided not to go to college, paid their way, or already responsibly paid off their loans.” No matter which side ultimately prevails, it’s clear that approximately 8 million U.S. borrowers — with their payment plans now paused until the SAVE Plan is either rescued or rescinded — face an uncertain financial future.
2 | (314) 961-5678
Published by Newsletter Pro • www.newsletterpro.com
Made with FlippingBook Ebook Creator