August 28, 2024
If you have a federal student loan and are one of the 8 million enrolled in the SAVE income driven repayment program, the Supreme Court just put a hold on the entire thing – at least temporarily.
I’ve been telling you since last month that several Republicans led states sued the Biden administration in two separate cases in two separate jurisdictions over the SAVE program 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.
The fact is – the save program was implemented last year. People have been using it since then. The department of education says they have every right under the law to create and administer student loan repayment programs like this one. This not a total student loan forgiveness program. It’s a program that recalculates a borrower’s monthly payments and keeps interest in check. For certain borrowers after 10 years of payments it also can speed up forgiveness but that part of the program hadn’t taken effect yet.
But as of today – nothing can happen with the program. So what do you do if you’re already in it? The department of education says you have automatically been moved into interest-free forbearance and you don’t need to make your payments until this legal stuff all gets sorted out.
But when is that going to happen? Well this all depends on when the 8th Circuit Court of Appeals makes a final decision. Back in July – the 8th Circuit put a temporarily paused any ability of the Department of Education from administering the SAVE program while this case plays out in their court. The Biden administration appealed to the supreme court and said hey justices– we have 8 million people in forbearance right now because of this 8th Circuit order — we’re not allow to do anything include give them their monthly payment amount – can you lift the 8th Circuit order so we can continue to administer the program?
Today—the Supreme Court said no. The temporary pause from the 8th Circuit will stand. But the Supreme Court also said – hey – 8th Circuit, you better make a final decision asap. No doubt – whoever loses in the 8th Circuit will appeal the final ruling to the Supreme Court.
Read more about SAVE forbearance here.
Read the Supreme Court order here.
