The U.S. Department of Education has announced a pause in payments for millions of student loan borrowers as it faces legal challenges defending its relief plan. Borrowers enrolled in the Biden administration’s new repayment program, known as SAVE, will be placed in interest-free forbearance while the plan is under scrutiny.
SAVE, which stands for Saving on a Valuable Education, has been criticized by Republican-led states for allegedly overstepping its authority and attempting to circumvent the Supreme Court’s decision to block a sweeping student debt forgiveness plan in June 2023. Despite the legal challenges, the Education Department had already forgiven $5.5 billion in student debt for 414,000 borrowers through the SAVE Plan.
The legal battles surrounding SAVE highlight the ongoing controversy surrounding student loan forgiveness and repayment programs. While the Biden administration is expected to continue its efforts to deliver wide-scale debt cancellation, experts anticipate that these plans will also face legal challenges.
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