A Biden plan cuts student loan payments for millions to $0. Will it be the next legal battle?
A Biden plan cuts student loan payments for millions to $0. Will it be the next legal battle?
This summer, millions of Americans with student loans will be able to apply for a new repayment plan that offers some of the most lenient terms ever.
The Biden administration calls it a “student loan safety net.” Opponents call it a backdoor attempt to make college free. And it could be the next battleground in the legal fight over student loan relief.
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HOW IS BIDEN’S PLAN DIFFERENT? As part of his debt relief plan announced last year, Biden said his Education Department would create a new income-driven repayment plan that lowers payments even further. It became known as the SAVE Plan, and it’s generally intended to replace existing income-driven plans.
Borrowers will be able to apply later this summer, but some of the changes will be phased in over time.
Right away, more people will be eligible for $0 payments. The new plan won’t require borrowers to make payments if they earn less than 225% of the federal poverty line — $32,800 a year for a single person. The cutoff for current plans, by contrast, is 150% of the poverty line, or $22,000 a year for a single person.
Another immediate change aims to prevent interest from snowballing.
As long as borrowers make their monthly payments, their overall balance won’t increase. Once they cover their adjusted monthly payment — even if it’s $0 — any remaining interest will be waived.
Other major changes will take effect in July 2024.
Most notably, payments on undergraduate loans will be capped at 5% of discretionary income, down from 10% now. Those with graduate and undergraduate loans will pay between 5% and 10%, depending on their original loan balance. For millions of Americans, monthly payments could be reduced by half.
Next July will also bring a quicker road to loan forgiveness. Starting then, borrowers with initial balances of $12,000 or less will get the remainder of their loans canceled after 10 years of payments. For each $1,000 borrowed beyond that, the cancellation will come after an additional year of payments.
For example, a borrower with an original balance of $14,000 would get all remaining debt cleared after 12 years. Payments made before 2024 will count toward forgiveness.
HOW DO I APPLY? The Education Department says it will notify borrowers when the new application process launches this summer. Those enrolled in an existing plan known as REPAYE will automatically be moved into the SAVE plan. Borrowers will also be able to sign up by contacting their loan servicers directly.
It will be available to all borrowers in the Direct Loan Program who are in good standing on their loans.
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The Biden administration formally finalized the rule this month. Conservatives believe it’s vulnerable to a legal challenge, and some say it’s just a matter of finding a plaintiff with the legal right — or standing — to sue.
Conservatives already frothing at the mouths and getting their checkbooks out for Clarence over this.
61Oh please, Thomas doesnt take checks. He takes venmo.
27Conservatives reaction to anything that benefits the average american: 😡
19
Giving a cancer cure for free to a cancer patient is deeply unfair to people without cancer...said Republicans probably
18But what about the people that have already died from cancer?
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Conservatives believe it’s vulnerable to a legal challenge, and some say it’s just a matter of finding a plaintiff with the legal right — or standing — to sue.
The plaintiff in the other case didn't have standing either, so why would they need it this time. The court is beyond simple hurdles like "precedent" or "standing".
18Not only no standing but also Roberts straight up legislates from the bench by rewriting the heroes act wording to not mean what Congress wrote clearly.
They're going to do what ever the fuck they want with the cases that come before them until someone stops them.
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Call it a “tax cut for students” let the conservatives go nuts trying to justify stopping it.
16"Grumble grumble bootstraps grumble TikTok grumble uphill both ways grumble lazy avocado toast" - Conservatives, probably
7
Forgiveness didn't happen, and while there's a tenuous argument to be made that the way Biden went about it made it easier for the Supreme Court to block it, the Supreme Court was always gonna block it. There's things to get mad at Biden about, sure. This ain't one. Progressives were clamoring for it, centrists were clamoring against, and Biden listened to progressives. I'm not going to fault him for doing something progressives wanted.
Centrists argued at the time that it was just a bandaid and didn't solve the whole problem of college being too expensive, and I completely agree. However, centrists are fond of saying to not let the perfect be the enemy of the good and that politics is the art of the possible whenever they successfully block progressive policy, so demanding perfection out of the gate when they knew perfection would never get past Manchin, let alone Republicans, strikes me as rank hypocrisy in the service of blocking something they didn't want to do.
So, that's where I'm coming from on that.
Here's how that informs my opinion regarding this:
Biden had a specific contingency plan ready to go. I like the plan, not because it's perfect. It's not. It's more complex than the previous forgiveness, and complexity is attack surface. But I'm not demanding perfection. Centrists were and I hope they've stopped. I know that this is a situation where Biden is constrained by the limits of what he can do via executive order, and this is real relief.
From an optics standpoint, he's in a position that he hasn't been for most of his presidency. He's in direct, unobstructed opposition to a group of corrupt unabashed conservatives who are violating existing judicial norms and ruling in bad faith. One of the major (valid) criticisms of Democrats in the past few election cycles is that they're too willing to just let conservatives ignore norms and run roughshod over everything, while never fighting back in kind. But the worst the court can really do to Biden is rule against this and demonstrate that they're both illegitimate and hate the people that Biden is openly fighting for, or rule in his favor or decline the case, and hand Biden a victory he can crow about. But he needs to crow about it if he wins, and have another contingency ready to go immediately if he doesn't. We need to make some fucking noise about this.
But the best part of this is that his own party can't get in his way. Manchin can't do shit. There's no bill to split and then kill the progressive portion of. Biden gets to be the guy he claimed to be when he was running. He's in a position to fight like hell for young people, and provide a counterexample for people who don't vote because they don't think anyone's fighting for them.
You want to get young people to the polls, don't scold them. Sell this plan. If it fails, sell the contingency. Show them an octogenarian fighting for them against blatantly unfair bullshit and fighting anyway. Against a believable proxy for the people you want them voting against instead of some guy in your own party you can't make too mad because reasons.
12You want to get young people to the polls, don’t scold them. Sell this plan. If it fails, sell the contingency.
The problem is people now know that no matter what any president says the arcane machinations of Washington will likely prevent things from happening, at least on a timescale that humans can comprehend.
5The problem is people now know that no matter what any president says the arcane machinations of Washington will likely prevent things from happening, at least on a timescale that humans can comprehend.
Demonstrably fighting for a concrete plan with obvious benefits is a big step up from what democrats have been doing.
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Well from what I can tell as normal person with limited legal knowledge the previous ruling on student loans said the education department couldn't cancel debt just restructure it. This seems like a restructure to me. I am happy with this new restructure. It seems fair, more sustainable as a long term fix and does change the repayment based on current income instead of income at time of loan. All good things and I am happy to apply.
Lets see if this one sticks
12And the GOP wonders why they don't resonate with the younger generations...hmmm...
10If he's actually able to go through with one of these loan forgiveness plans without the GOP fucking it up again, he'll be one of the greatest presidents in my book. Things need to change for students so badly, and anyone that's opposed is a fucking asshole as far as I'm concerned.
10For the "ThErE aRe WaYs To DiScHaRgE sTuDeNt DeBt!1!1!!" crowd:
I've been trying to get approved for SSDI since November 2020. I'm 36 and have an MBA with ~$156,000 in student loan debt.
I'm Autistic with PTSD, C-PTSD, Chronic Suicidal Ideation, Chronic Insomnia, Agoraphobia, Treatment-Resistant Depression, Multiple Anxiety Disorders, IBS-C, IBS-D, Fibromaylygia, Recurrent SIBO, potentially Sjögren's Syndrome (I had a saliva gland lip biopsy yesterday), Hypoglycemia, GERD, Anal Fissures, and the diagnoses keep growing.
I haven't been able to work since December 2019.
I received my FIFTH denial from SSA in late May (I took the first claim to the Appeals Council and started my second claim in October 2022 after the Appeals Council upheld the ALJ Denial). I'm currently trying to find a lawyer (again).
Granted, the above is anecdotal, but I have seen anecdotes like mine all over social media and IRL, especially with the pandemic and Long-COVID.
These "targeted student loan forgiveness options" are virtually impossible to receive, and you pretty much have to "spend" the equivalent of the student loan amount between lost wages and lawyer fees actually to have a chance to be eligible for them.
Student loan forgiveness needs to happen. It needs to be comprehensive and wide-ranging. It's not only the humane thing to do, it's the best chance of stabilizing our economy long-term (followed by climate change mediation and reversal).
10Voices across the political spectrum have said it amounts to a form of free college.
This doesn't amount up a form of free college. Only capitalist supporters could say such a thing.
9Since when is free college a bad thing? Don't we want people to go to college? Isn't that why we made this Rube Goldberg machine of loans to pay for it?
4
America still doesn't have free college? I'm from a poor third-world country but we have completely free elementary, high school, and state colleges, what prevents America from having the same?
8Greed
4There's a lot of contributing factors, but one I don't see mentioned a lot is federalism. America is like fifty separate countries stuffed into a trench coat. In most things, like Medicare, SNAP, and highway funding, money is given to the states by the federal government and the states administer the programs.
So it's entirely possible, as we're seeing with Medicare, to have the federal government try to help people but have the states fuck it up, either through incompetence or by being run by the opposition party.
Imagine how hard it would be in your poor third-world country if it was split into fifty different pieces, all with different rules about how education works.
4