The Biden administration's SAVE plan for student loan borrowers is currently facing legal challenges, which has caused uncertainty regarding its implementation.
Two multi-state lawsuits are being deliberated in federal courts, questioning the administration's authority to enact the plan. As a result, borrowers enrolled in the SAVE plan are not required to make payments and are placed in an interest-free forbearance.
The Department of Education had previously paused all income-driven repayment (IDR) applications to comply with court rulings. However, IDR applications have now resumed, although borrowers may still be placed in forbearance during the application process.
The newly reopened IDR application is a simplified version, lacking certain features that will be reintroduced in the future.
The legal status of the SAVE plan has significant implications for borrowers seeking debt relief, as it has stalled further debt forgiveness initiatives. The outcome of the ongoing lawsuits will determine the future of the SAVE plan and its provisions.
The Biden administration is also facing challenges with another debt relief initiative, which has been blocked by federal courts. These legal battles have the potential to reshape the landscape of student loan repayment and forgiveness in the United States.