New Student Loan Repayment Plan Now In Jeopardy

yellow stick notepad that has federal student loans written on it
Adé Hennis
September 4, 2024

The US Supreme Court has temporarily halted the implementation of SAVE, a new federal student loan repayment program. Now, approximately eight million borrowers who were enrolled in the program will have their loans placed in interest-free forbearance.

Launched in August 2023, the Saving on a Valuable Education, or SAVE, was described as the “most affordable repayment plan ever.” However, the administration now faces lawsuits from Republican-led states like Arkansas, Florida and Missouri that argue that the administration is overstepping its authority.

In response to the court order, an Education Department spokesperson stated: “We are assessing the impacts of this ruling and will contact borrowers directly with any impacts that affect them.”

Before facing legal issues, the department had already forgiven $5.5 billion in student debt for 414,000 borrowers through the SAVE plan. Applications for the SAVE plan and other income-driven repayment plans are currently unavailable.

With the pause in implementing the SAVE plan, how much borrowers will owe each month after the plan is implemented is unclear.

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