July 13, 2024
If you are one of the 8 million student loan borrowers enrolled in the SAVE income driven repayment program — you need to know the fate of this whole program is now in limbo after an appeals court temporarily blocked it. So what does this mean for the 35,000 borrowers who had their loans forgiven today?
Nothing and I’ll tell you why in a second. But first — let’s talk about this major court ruling from the 8th circuit court of appeals. It actually shouldn’t be a surprise….I told you in this video a few weeks ago that several Republican led states sued the Biden administration in federal courts in Kansas and Missouri trying to stop the SAVE program. These states attorneys general were arguing not only did the Education Department overstep its authority by creating the plan, but also if it were allowed to continue it would saddle those states with serious debt because they couldn’t count on the revenue they generate from fees and interest on your loan. Both federal judges in Kansas and Missouri issued temporary injunctions temporarily pausing different parts of the save program. The Biden administration appealed and the 10th circuit court of appeals paused the Kansas judge’s order and said the SAVE program could continue as the case played out.
Well today, the 8th circuit court of appeals took the opposite stance and issued this one-page order not only granting the request of seven Republican led states…but the unsigned order actually appears to go even further by blocking the Education Department from implementing any part of the SAVE program not just some of them.
No doubt this is going to end up in front of the supreme court. The question is when and what’s going to happen to your loan in the meantime. We just don’t have those answers yet.
Because this just happened this afternoon the Education Department says it is still assessing what this means for all you borrowers and will give some guidance as soon as possible. As soon as I get that from them I will of course pass it along to you.
As for the 35,000 borrowers who had their loans forgiven today — they were part of the public service loan forgiveness program they are teachers, nurses, law enforcement and first responders. That program is totally different than the save program this program has been around since the Bush administration. It is not impacted at all by today’s ruling.
