On Aug, 24, 2022, seeking relief for those with crippling student loan debt while trying to navigate through a pandemic, the Biden administration came up with the REPAYE (Revised Pay As You Earn Repayment) plan. This was Pres. Biden’s efforts to provide relief for borrowers who were depending on up to $20,000 of their loan balances to be forgiven.
Democrats, working for the common good.
“Not so fast,” claimed the Supreme Court in June, 2023. The conservative majority ruled Biden’s administration abused its executive authority by attempting to eliminate up to $20,000 in student loan debt for millions of Americans. That left 26 million people who had applied for student debt cancellation hanging in the wind. The president took another route.
Democrats, working for the common good.
During the summer of 2023, the Biden Administration, through the Dept. of Education, launched a new website to allow student loan borrowers to enroll in a new income-driven repayment (IDR) plan called Saving on a Valuable Education (SAVE). Many borrowers would see lower monthly payments under this new plan, which replaced the old REPAYE plan. SAVE was expected to get more affordable in 2024 when required monthly payments were cut from 10% to 5% of discretionary income. This was for student loan borrowers who had only undergraduate loans. Now with the new SAVE plan, income above 225% of the federal poverty level would be counted as discretionary income. For example, individual borrowers would only be required to make payments on income over $32,805 and wouldn’t owe any payments if they made less than that. The amount would be $67,500 for a family of four.
Borrowers who had enrolled in SAVE would now save $1,000 a year compared to previous IDR plans. Additionally, 1 million low-income borrowers would be able to make “payments” of $0 while still receiving credit towards having the remaining balances of their loans forgiven. According to the Dept. of Education, after 20 years of repayment (25 years for graduate school loans), any balance remaining is wiped away.
Another significant change with the SAVE plan, if payment was less than the interest on the loan in any given month, the Dept. of Education wouldn’t charge the remaining interest. As long as a borrower made their payments, their loan balance wouldn’t increase because of interest.
Democrats, working for the common good.
Naturally this was not sitting well with the opposition. In early Sept., 2023, Senate Republicans planned on forcing a vote to overturn the new option, claiming SAVE was unfair to other Americans who had no student loan debt. Senators Bill Cassidy (LA), John Thune (SD), John Cornyn (TX), and 14 Republican colleagues introduced a Congressional Review Act resolution (CRA) to overturn Pres. Biden’s repayment plan.
Due to those efforts, there are now two student debt relief plans tied up in court, both being challenged by Republican-led states. The 8 million people now enrolled in the SAVE plan are currently in limbo, after court rulings blocked the Biden administration from enacting the plan. The loans for these borrowers have been put on hold for another 6 months while the administration defends the plan in court.
Additionally, another Biden plan to use the Higher Education Act to forgive all or some of the student debt held by 30 million borrowers also hit a legal roadblock, with a court putting that plan on hold in early October.
Project 2025 calls for abolishing the Dept. of Education, claiming student loans should be handled by the private sector and they want to get rid of student debt relief altogether. "The new administration must end the practice of acting like the federal student loan portfolio is a campaign fund to curry political support and votes. The new administration must end abuses in the loan forgiveness programs. Borrowers should be expected to repay their loans."
Democrats, working for the common good.
Republicans, not so much.
“One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors.” Plato