September 10, 2024
If you are one of the 8 million federal student loan borrowers in limbo over the SAVE income driven repayment program, I have a quick update for you. We have a better idea of when this whole issue could be resolved.
As you know – the entire SAVE program is being challenged in court by several Republican led states that say the program was illegally created and has the potential to financially harm the states. I told you all about that in this video. Because of those legal challenges – the 8th circuit court of appeals agreed with a lower federal court that the Department of Education has to stop implementing and administering the program while these court cases play out. And the Supreme Court agreed with that for now.
So because of that court order – if you are in the SAVE program – right now – you are in – interest free forbearance. Meaning you do not have to make any payment while this litigation is ongoing and your loan balance is not accruing interest – but also these months will not qualify towards any forgiveness that you may ultimately be entitled to.
So now to the timing of when this is going to be resolved. The 8th circuit has just issued this order saying there will be an oral argument on October 24th. The appeals court will then issue a decision at some point after that. When that happens whoever loses will absolutely be appealing again to the United States supreme court. But since by that time they will already be in the thick of their new term, the side that appeals will likely ask for the court to get involved on an emergency basis.
The supreme court could grant that emergency request and schedule an oral argument and then perhaps hand down a decision by June of 2025. Or – the court could say yes we accept this case – however, we’ll hear it next term, in which case we won’t get an opinion until June of 2026. Or the justices could just say no – we’re not going to hear this case and the 8th circuit ruling stands.
I guess what I’m saying is – the quickest we’re going to get a resolution on this issue will be when the 8th circuit hands down a ruling perhaps in November or December. And the quickest we could get a final resolution from the supreme court – if they decide to take this case – would likely be summer of 2025. The other thing that could change all of this again would be the election. A different president could mean a different stance on student loans and student loan forgiveness.
Read the 8th Circuit order here.
