The SCOTUS argument as to why President Biden's COVID-era student loan forgiveness program had to die was because the executive didn't have the authority from Congress to run the program under emergency rules. The Biden administration has responded with "We do have explicit authority to modify student loans under the Education Department and we're going to use it."
The SAVE, or Saving on a Valuable Education, plan was finalized after the Supreme Court struck down President Joe Biden’s student debt forgiveness initiative in June. It marks a significant change to the federal student loan system that could lower monthly loan payments for some borrowers and reduce the amount they pay back over the lifetime of their loans.
“Part of the president’s overall commitment is to improve the student loan system and reduce the burden of student loan debt on American families,” a senior administration official said, previewing the beta website first to CNN. “The SAVE plan is a big part of that. It is important in this moment as borrowers are getting ready to return to repayment.”
Federal student loan borrowers can access the beta website at https://studentaid.gov/idr/. The enrollment process is estimated to take 10 minutes, and many sections can be automatically populated with information the government has on hand, including tax returns from the IRS, administration officials said.
“We will be able to show borrowers their exact monthly payment amount and give them the ability to choose the most affordable repayment plan for them,” one official said.
Borrowers will only need to apply one time, not yearly as past systems require, which officials said would make this plan “much easier to use.” Users will receive a confirmation email once the application is submitted, and the approval process, which can be tracked online, is expected to take a few weeks.
Those already enrolled in the federal government’s REPAYE, or Revised Pay As You Earn, income-driven repayment plan will be automatically switched to the new plan.
The full website launch will occur in August, and applications submitted during the beta period will not need to be resubmitted. The beta period will allow the Department of Education to monitor site performance in real time to identify any issues, and the site may be paused to make any necessary updates, officials said.
The SAVE plan, which applies to current and future federal student loan borrowers, will determine payments based on income and family size, and some monthly payments will be as small as $0. The income threshold to qualify for $0 payments has been increased from 150% to 225% of federal poverty guidelines, which translates to an annual income of $32,805 for a single borrower or $67,500 for a family of four. The Education Department estimates this means more than 1 million additional borrowers will qualify for $0 payments under the plan.
Some borrowers could have their payments cut in half when the program is in full effect next year and see their remaining debt canceled after making at least 10 years of payments, a significant change from previous plans.
With the new plan, unpaid interest will not accrue if a borrower makes their full monthly payments.
But the new plan does come at a cost to the federal government. Estimates of the program’s expense have varied depending on how many borrowers sign up for the new plan, but they range from $138 billion to $361 billion over 10 years. By comparison, Biden’s student loan forgiveness program was expected to cost about $400 billion.
The Education Department has created similar income-driven repayment plans in the past and has not faced a successful legal challenge, officials noted.
The beta site launch comes as borrowers will need to begin making federal student loan payments again in October after a pause of more than three years because of the pandemic.
The question now becomes how quickly Republicans will sue to block the program and send it to the Supreme Court. They will find their federal judge to block the program, and we'll see how fast they move to get it to SCOTUS to end it. I'm betting they will get it blocked in the next few months, but delay any further legal action until after summer 2024. After the election, if Trump wins, he'll just end the program in 2025 or better yet, just have SCOTUS do it so he can say "Oh well I tried" and blame SCOTUS justices who won't face a lick of accountability. If Biden gets a second term, same thing happens.
The trillion-dollar-plus student loan industry that owns SCOTUS conservatives won't let this stand. This will be blocked before the October deadline and the hundreds of billions in student loan repayments will crash the economy by early next year.
Everyone will blame Biden, and then Trump wins easily.
That'll be the plan. Whether it works, well, you tell me.
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