Biden-Harris Administration launches SAVE plan after Supreme Court rejects student loan forgiveness plan

The Supreme Court struck down the Biden-Harris Administration’s efforts to forgive up to $400 billion in debt, but it persists by launching a new SAVE repayment plan. Photo courtesy of WikiCommons

The Biden-Harris Administration launched the Saving on a Valuable Education (SAVE) plan to help current borrowers alleviate their financial debt. The plan is based on an income-driven repayment plan that considers income and family size. 

“As long as I am president, my administration will never stop fighting to deliver relief to borrowers and bring the promise of college to more Americans,” Biden stated in a video about SAVE.

Four million people are currently enrolled in Biden’s new SAVE plan to decrease their monthly loan bills. Under SAVE, borrowers won’t need to worry about unpaid interest, and they can lower their monthly payments due to the protected income threshold being higher.

This June, the Supreme Court rejected Biden’s student loan forgiveness plan to forgive up to $400 billion in student loans. In a 6-3 ruling, the Justices ruled that The Biden Administration overstepped its boundaries in providing aid for student loans.

Supreme Court Justice Roberts gave the majority opinion of the court, and expressed that the Biden administration’s authority to “waive or modify” loan debt cancellation is “in the same sense that the French Revolution ‘modified’ the status of the French nobility.”

According to the Education Data Initiative, 43.6 million students are in debt, and the loan forgiveness plan would have helped forgive nearly half of those borrowers. 

The court ruled that the Higher Education Relief Opportunities for Students Act (HEROES), does not authorize The Biden Administration’s authority to implement a student loan forgiveness plan. 

According to the Congressional Research Service, the HEROES Act authorizes the Secretary of Education to “waive or modify any statutory or regulatory provision applicable to the student financial assistance program.” 

The Department of Education would have provided up to $10,000 in cancellation benefits to borrowers based on income, and those who received a Pell Grant — a financial student loan provided for students based on financial need — could qualify up to $20,000. 

Ashley Jo, a sophomore psychology major at Chapman University, addressed the impact of student loan debt and how the SAVE plan can help current borrowers repay their student debt.

“Finding plans like this, it certainly does help, but I feel like there are people who have lived more difficult lives than me that need this plan more than me,” Jo told The Panther. “I am considered low income, and I’m considering taking out loans, but I don’t really care what happens to me. I don’t care if my income is a little, like it’s right at the cusp of the cutline. I just want something to happen, some plan to be enacted to help people who are in a more difficult situation.”

David Carnevale, an assistant vice president in Chapman’s Undergraduate Financial Aid Office, expressed concerns he has received from students who are borrowing student loans.

“Some students are making the choice to attend, even though it might be a stretch financially…then those student loans become a reality,” Carnevale said. “So, I think the biggest concern, really, is ‘Am I gonna go into too much debt? And if I am, how am I gonna pay that off?’” 

The SAVE plan will fully come into effect next summer, with additional benefits being added to the plan in July 2024. The additional benefits include undergraduate loans being cut in half and paying an average of 5% and 10% of their income based on the principal balance of loan debt being added.

Sophomore film and television production major Alaina Keneley spoke on how potential revisions could make the student loan process more accessible and easier for current borrowers.

“I feel like they could revise the system in a way that makes it easier and not so much, you do this, and you’re screwed over for the rest of your life, type-of-deal,” Keneley said.

Those who would like to sign up for the recent SAVE plan can do so at studentaid.gov/SAVE by filling out the application. At Chapman, students can contact the Financial Aid Office at finaid@chapman.edu to schedule an appointment and ask questions regarding student financial aid and loans.