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President Biden’s Justice Department asked the Supreme Court to allow the SAVE plan to go through.
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It follows the 8th Circuit blocking the SAVE student-loan repayment plan in its entirety.
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For now, millions of enrolled borrowers are on forbearance as the legal process continues.
President Joe Biden’s administration is asking the nation’s highest court to allow its new student-loan repayment plan to go through.
On August 9, the 8th Circuit Court of Appeals officially blocked the SAVE income-driven repayment plan, intended to give borrowers lower monthly payments and a shorter timeline for debt relief.
It followed a legal rollercoaster for the 8 million borrowers enrolled in SAVE. Earlier this year, two separate groups of GOP state attorneys general filed lawsuits to block parts of SAVE, and a flurry of court decisions ultimately led the Education Department to place all enrolled borrowers on forbearance until the legal process is resolved.
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 SAVE’s implementation.
“The Eighth Circuit’s injunction has severely harmed millions of borrowers and the Department by blocking long-planned changes and creating widespread confusion and uncertainty,” Solicitor General Elizabeth Prelogar said in the filing. “Indeed, as the Eighth Circuit acknowledged, the injunction has forced the Department to place the affected borrowers into temporary forbearance — a result that is unambiguously worse for all involved.”
Prelogar asked the Supreme Court to lift the 8th Circuit’s block on SAVE and, if not, take on the case and expedite it in the fall.
This is in response to the lawsuit led by Missouri’s attorney general, which said that allowing SAVE to go through would harm student-loan company MOHELA’s revenue. Prelogar argued that the 8th Circuit’s ruling was “overbroad” and, at the very least, should not apply to borrowers who are not serviced by MOHELA.
She also said that permanently blocking SAVE would cause harm to the Education Department and the millions of enrolled borrowers because the department would be required to recalculate monthly payments and retrain servicer staff.
“Many borrowers are now experiencing intense confusion from being told that their payments must be recalculated and from being placed in forbearance — which will delay any eventual loan forgiveness, including under programs not challenged here, like the Public Service Loan Forgiveness program,” Prelogar said.
She added that “borrowers would suffer additional harm if they are eventually sent higher bills and told that they can no longer count on the forgiveness that they were promised at the end of their repayment periods.”
The Supreme Court asked the GOP states to respond to file a response by August 19.
Business Insider previously spoke to borrowers enrolled in SAVE who have experienced confusion and uncertainty as to the future of their student-loan payments. One 61-year-old borrower said she’s a “nervous wreck” each time there’s a new lawsuit update.
“I want to be able to just breathe, but retiring and having to pay for student loans when I’m not even working anymore and paying most of my Social Security to student loans, it’s ridiculous,” she said. “It’s extremely stressful. I feel like they’re getting ready to pull the rug out from under us again.”
Read the original article on Business Insider
