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President Biden’s Justice Department has asked the Supreme Court to approve the SAVE plan.
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This follows the 8th Circuit’s decision to completely block the SAVE student loan repayment plan.
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Currently, millions of registered borrowers are being granted a payment moratorium while the legal process continues.
President Joe Biden’s administration has asked the nation’s Supreme Court to approve a new student loan repayment plan.
On August 9, the Court of Appeals for the 8th Circuit officially blocked SAVE’s income-based repayment plan, which was intended to provide borrowers with lower monthly payments and a shorter term for debt consolidation.
It followed a legal roller coaster for the 8 million borrowers enrolled in SAVE. Earlier this year, two separate groups of GOP attorneys general filed lawsuits seeking to block parts of SAVE, and a flurry of court rulings eventually led the Department of Education to place all enrolled borrowers on forbearance until the legal process was completed.
Now Biden’s Justice Department is asking the Supreme Court to lift the 8th Circuit’s block on the plan and allow the administration to move forward with implementing SAVE.
“The Eighth Circuit’s order has gravely harmed millions of borrowers and the Department by blocking long-planned changes and creating widespread confusion and uncertainty,” Attorney General Elizabeth Prelogar said in the document. “As the Eighth Circuit recognized, the order has forced the Department to place affected borrowers in temporary forbearance — an outcome that is unambiguously worse for everyone involved.”
Prelogar asked the Supreme Court to lift the 8th Circuit’s block on SAVE and, if unsuccessful, to hear and expedite the case in the fall.
This is in response to a lawsuit filed by Missouri’s attorney general, who said allowing SAVE to continue would hurt the revenue of student loan company MOHELA. Prelogar argued that the 8th Circuit’s ruling was “overly broad” and, at the very least, should not apply to borrowers not served by MOHELA.
She also said that permanently blocking SAVE would harm the Department of Education and the millions of enrolled borrowers because the department would have to recalculate monthly payments and retrain service personnel.
“Many borrowers are now in great confusion as they are being told their payments will have to be recalculated and placed into forbearance, delaying the eventual forgiveness of loans, including under programs that are not at issue here, such as the Public Service Loan Forgiveness program,” Prelogar said.
She added that “borrowers would suffer additional harm if they end up with higher bills and are told they can no longer count on the forgiveness they were promised at the end of their repayment term.”
The Supreme Court has asked GOP states to file responses by Aug. 19.
Business Insider previously spoke with borrowers who have enrolled in SAVE and have experienced confusion and uncertainty about the future of their student loan payments. One 61-year-old borrower said she is a “nervous wreck” every time there is a new update to the lawsuit.
“I just want to be able to breathe, but retiring and having to pay student loans when I’m not even working anymore and having to pay most of my Social Security in student loans is ridiculous,” she said. “It’s extremely stressful. I feel like they’re trying to pull the rug out from under us again.”
Read the original article on Business Insider
