On the 28th, the Supreme Court ruled to reject the Biden administration’s request to resume the implementation of the income-based student loan repayment plan ‘SAVE’. The SAVE plan was put on hold on the 18th of last month when the 8th Circuit Court of Appeals issued a temporary suspension order. (Reported on page A1 of the July 20th edition of this newspaper) After that, the Biden administration filed an emergency appeal to the Supreme Court against the temporary suspension order, but it was not accepted.
The Supreme Court’s position is that the main decision on whether to implement it should be made in the appeal. In August of last year, the Biden administration implemented the ‘SAVE’ plan, which significantly reduces the repayment burden on borrowers compared to the previous income-based repayment program. The SAVE plan expanded the target for exemption from monthly student loan repayment from the previous 150% of the federal poverty line (annual income of $24,000) to 225% (annual income of $32,805).
In addition, starting this February, a measure was launched to forgive the remaining debt of ‘SAVE’ subscribers with student loan principal of less than $12,000 if the debt is repaid for 10 years, and a plan was scheduled to be launched in July to reduce the borrower’s monthly payment by half from 10% of discretionary income (the amount of actual income minus living expenses) to 5%.
However, the future is uncertain as seven Republican-leaning states, including Missouri, filed an unconstitutional lawsuit and the 8th Circuit Court of Appeals issued an order temporarily and completely blocking the implementation of the SAVE program. According to the Biden administration, there are about 8 million student loan borrowers enrolled in the SAVE plan.