On Wednesday, the Supreme Court declined to remove the block that was on President Joe Biden’s student loan repayment plan. This was aimed at reducing monthly student payments as well as accelerating loan forgiveness.
The Joe Biden administration sought to get the plan back into action; this was after the lower courts halted it this summer in response to legal challenges from Republican-led states. The high court’s decision, which is issued without any noted dissent, leaves the initial plan on hold.
Impact on Borrowers Enrolled in the SAVE Plan**
It is good to note that the 8 million borrowers that are currently enrolled in the SAVE (Saving on a Valuable Education) plan are not immediately impacted by the court’s order. This plan was implemented about a year ago.
The Department of Education had placed every borrower in an interest-free forbearance last month. This allowed them to pause their monthly payments without accruing interest. What’s more, the SAVE plan also allowed 4.5 million borrowers to see about “zero dollar payment each month,” which further remains operational for those already enrolled.
White House Vows to Defend the SAVE Plan
Based on the decision made by the Supreme Court, the White House has also reaffirmed its commitment to defending the SAVE plan. According to the White House spokesman, Angelo Fernández Hernández, “We won’t stop fighting against Republican elected officials’ efforts to raise costs on millions of their own constituents’ student loan payments.” the admission is also determined to fight back against what is viewed as an effort to undermine a policy designed to provide financial relief for borrowers.
The Department of Education has further expressed its disappointment in the ruling, noting that lifting this unbearable injunction would have enabled lower borrowers payments as well as additional benefits for borrowers spanning across the country.
Supreme Court Signals Urgency in Lower Court Proceedings
Furthermore, the Supreme Court indicated that it “expects” the 8th U.S. Circuit Court of Appeals, which is known for handling the challenge to the plan, to issue its decision “with appropriate dispatch.” What this means is that the high court is urging the lower court to expedite its review of this case before there is any further intervention from the Supreme Court.
Frankly speaking, the repayment plan is still uncertain as it faces a series of legal challenges. In addition, the Congressional Budget Office has also estimated that that plan could cost about $276 billion. Last month, Alaska, South Carolina, and Texas all requested that the Supreme Court keep a partial block on the program, making their broader legal challenge unfold. In a separate order on Wednesday, the court also denied the request for a partial block.
The SAVE Plan’s Role in Biden’s Education Agenda
The SAVE plan is seen as a cornerstone as well as an amazing plan of the Biden administration’s student loan policy. This plan was introduced after the Supreme Court struck down Biden’s earlier. This plan featured a more comprehensive student loan forgiveness program.
SAVE also offers one of the most generous repayment terms currently available from the government. Furthermore, this plan, which is based on a different legal authority than the one that was struck down last year, was aimed at providing lower monthly payments as well as a quicker path to loan forgiveness, particularly for low-income borrowers.
