Biden SAVE Plan: There are growing worries that other efforts to forgive student loans could be affected by a decision that isn’t clear after the 8th Circuit Court of Appeals refused to explain its recent decision that stopped President Joe Biden’s SAVE student loan plan. The goal of this new income-driven payback plan is to lower the amount of monthly income that borrowers have to pay back.
What President Biden and the Department of Education will do about the court’s lack of clarity is still unknown. The injunction they were trying to get changed is likely to stay in place until the 8th Circuit Court looks at the case again or the Supreme Court weighs in. This could make it harder to carry out the SAVE plan and raises worries about the future of other programs that forgive student loans.
Student Loan Forgiveness Cuts: Are Cuts Still Being Made? Get the Latest Updates
According to Forbes, the Department had already requested an emergency stay of the 8th Circuit’s decision from the Supreme Court before the refusal to provide clarification. The request stated that if the ruling is upheld, it could “harm borrowers who have dutifully repaid their loans for up to 25 years by denying forgiveness that has been available under law for three decades.”
Biden SAVE Plan: Important details
Since its introduction last year, Biden’s Savings on a Valuable Education (SAVE) Plan has encountered resistance due to the Supreme Court’s denial of Biden’s prior attempt to completely cancel several loans. Republicans have sued the government over the plan, claiming it goes beyond President Biden’s power and allows for early debt forgiveness and zero monthly payments for more borrowers. Numerous states claimed in one lawsuit filed in Kansas and another in Missouri that the plan’s broad relief is “unlawful” and places a financial burden on the states.
Almost Half of Student Loan Borrowers Expecting Debt Forgiveness: Sallie Mae Report
Big Number
thirty million. When Biden first unveiled the SAVE proposal in August of last year, he projected that it would assist that many debtors. As of July, almost 8 million people have enrolled.
Tangent
Following the verdict on August 9, the Department of Education said that borrowers registered in the SAVE plan are in forbearance, which allows them to suspend payments without incurring interest while the litigation against the plan is being processed. Additionally, forbearance time will not be applied toward loan forgiveness.
