Christopher Madrid | Contributing Writer
Last June, the Biden-Harris administration, with the help of the Department of Education, developed the SAVE plan to combat America’s massive student debt. Now, after a series of lawsuits, SAVE is no more.
SAVE, or Saving on a Valuable Education plan, allowed students to pay off loans without accruing interest depending on their income. Out of the 8 million borrowers who enrolled during the program’s lifetime of August 2023 to August 2024, due to their low income, 4.6 million owed zero dollars in monthly payments.
This allowed SAVE borrowers to cease accruing interest, with the zero dollar monthly payment plan allowing the government to subsidize their interest. Eventually, after 10 years on the plan, the loans would be “forgiven” by the government.
Lawsuits were brought against the SAVE Plan and argued that it is an unconstitutional extension of Joe Biden’s presidential powers.
In July 2024, a federal court issued a stay preventing the continuation of the SAVE plan. The Supreme Court declined reviewing the case, and the decision was left to a federal court. As of August 14th, 2024, they issued an injunction preventing the SAVE plan’s features.
Since the appeal was declined by the Supreme Court, the SAVE Plan and its borrowers have been left in limbo. The Department of Education and Biden-Harris administration are still fighting for the implementation of SAVE.
Recently, the lawsuit was transferred, signifying a victory for student loan forgiveness.
The lawsuit was originally brought to Missouri and then in Georgia, and a Georgian Judge agreed with the Biden-Harris Administration, stating no harm comes to the State of Georgia from the loan forgiveness plan. The judge transferred the lawsuit to the United States District Court for the Eastern District of Missouri.
Current borrowers are encouraged to resort to other loan repayment plans and companies. SAVE is currently in forbearance. This translates as SAVE can no longer repay loans, though remaining with the plan will pause interest.
However, this interest-free path no longer leads to loan forgiveness. The amount of student debt is currently sitting at a total of $1.74 Trillion.
For FIU Students and alumni this can be a roadblock on the path to a debt-free life. FAFSA has not ceased the applications for IDR plans as students continue to apply in hopes for loan forgiveness.
With many alumni trying to establish a stable life, low to zero interest loans secure their financial future; and for the students remaining in the expensive Miami metropolitan area, loan forgiveness spells the difference from lifelong debt and financial freedom.
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