Student loan borrowers are confused – again.
President Biden’s term has been marked by bold actions on student loans, followed by numerous legal challenges that are difficult for borrowers to follow, the most recent being against his income-based repayment plan called Saving on Valuable Education (SAVE).
“I think there are a lot of moving parts for borrowers…chaos in the legal system will translate into chaos for borrowers and the [legal] The system is not one that maneuvers quickly. I have a lot of concerns about what borrowers are missing in all this turmoil,” said Persis Yu, deputy executive director of the Student Borrower Protection Center.
The SAVE plan began in October when the Biden administration increased the protected income of payments from 150% above federal poverty guidelines to 225%, while accrued unpaid interest outside of calculated payments was waived.
Its second half was scheduled to be implemented in July of this year, changing monthly payments from 10% of discretionary income to 5% and issuing more loan forgiveness to certain borrowers who have been making payments on their debts over a certain period of time.
Two cases came to court against the SAVE plan earlier this year, arguing it would hurt state revenues.
“Once again, the president is attempting to unilaterally impose an extraordinarily expensive and controversial policy that he has failed to pass through Congress,” said a lawsuit filed by Missouri.
The entire plan was initially halted temporarily before the judges in both cases ruled that the administration could proceed with reducing monthly payments. The Department of Education is still blocked from granting more student loan forgiveness under the plan.
As the decisions unfolded, the department temporarily withdrew SAVE applications and placed millions of borrowers in forbearance so they would not have to pay their debts until a final decision was made.
“I know these decisions can be confusing for borrowers, and it remains our top priority to provide clarity to you and continue our work to make higher education more affordable and accessible for more students from all walks of life,” said the Department of Education in a letter to borrowers.
Currently, some borrowers are still in forbearance until the end of the month, but are expected to start paying their debt again in August. Enrollment for the SAVE plan is open and borrowers are seeing their monthly payments decrease.
Republicans are not giving up, however, filing an emergency motion with the Supreme Court on Monday to block the reduction in monthly payments, a move that concerns advocates given the court’s conservative leanings.
“Often, the Supreme Court will review these cases to harmonize them and bring them together into a single case. So we were already hearing before Alaska and all these other states did the emergency [motion] this would likely or potentially end up in the Supreme Court,” said Natalia Abrams, president of the Student Debt Crisis Center.
“It is difficult to have any hope with this current Supreme Court, although we firmly believe that the law is on our side, and these were completely legal decisions and plans, which it seems when we look at the [presidential] immunity case, the Chevron case or the environmental cases that the Supreme Court does not decide on the side of the people”, he added.
The Biden administration has tried and failed to go against the Supreme Court before, with the president’s plan for universal debt relief struck down by the high court in the summer of 2023.
Despite the failure of universal forgiveness, Biden has forgiven more student loans than any previous presidency, totaling more than $150 billion.
While student loan advocates appreciate Biden’s efforts with the SAVE plan, some argue it doesn’t do much to help voters who feel let down by the lack of overall aid.
“As a borrower and someone who represents and talks to young adults about this issue, I think it’s just confusing. You’re trying to figure out, well, where is the relief that we were promised with the campaign,” said Van Freeman, senior director of policy and public affairs at Young Invincibles.
“Why don’t they continue to work with us to forgive this debt, to live up to the promise they made to us to forgive student loan debt?” Freeman added.
And the legal battles over student loans won’t end with the SAVE plan, as the Biden administration is finishing its rulemaking process to forgive more student loans, which will almost certainly face Republican lawsuits when the details are finalized.
This story originally appeared on thehill.com read the full story
