On Wednesday, the Supreme Court said it would not lift a block on key provisions in President Joe Biden’s SAVE income-driven repayment plan. The plan is intended to give 8 million enrolled borrowers lower payments and a shorter timeline for debt relief.
The Supreme Court, in a one-paragraph order, said it would not override a ruling from the 8th Circuit Court of Appeals that blocked the plan in its entirety on July 18 in response to a lawsuit led by Missouri’s attorney general, pending a final court decision. The 8th Circuit formally placed a preliminary injunction on the plan in early August.
The Education Department did not immediately respond to a request for comment from Business Insider on the implications of this ruling.
However, Solicitor General Elizabeth Prelogar wrote in a response to the Supreme Court that blocking the SAVE plan could come with significant costs to borrowers. The Education Department would be forced to recalculate millions of borrowers’ payments, requiring a forbearance period during which interest would not accrue. Borrowers would not make any progress toward forgiveness through Public Service Loan Forgiveness or income-driven repayment plans.
The Education Department has already placed SAVE borrowers on forbearance following the 8th Circuit’s decision, but at the time, it was unclear how long the forbearance would last. The back-and-forth court rulings have promoted confusion among many borrowers who are struggling to plan for their futures.
“I’m going to have to rebudget all over again,” Alan Pedrick, a 41-year-old SAVE borrower, previously told BI. “And this is probably the most difficult time of my life as far as finances go with the cost of housing, the cost of vehicles, gas, food has shot up and now they want to go back and make us start repaying. It’s kind of depressing, really.”
Source link
lol
