Students in America will be burdened with debt! Biden’s plan was ruined by the Supreme Court’s decision

US Student Loans: Education in America is very expensive. All Americans are able to get school education, but when it comes to going to college-university, the number of students studying there decreases. A large population of the middle class educates their children by taking student loans, which they keep paying for a long time. This is the reason why the biggest problem of America is the loan taken by the students. Due to this, students have to face a lot of financial difficulties. However, to solve the problem of student loans, President Joe Biden came up with the ‘Saving on a Valuable Education’ (SAVE) plan. This plan was related to student loan waiver. But the US Supreme Court has recently put a stay on Biden’s plan, due to which the future of millions of students has been put in question. President Biden had waived a lot of loans during his/her tenure, but this decision of the Supreme Court has dealt a blow to his/her efforts.

What is Joe Biden’s SAVE plan?
US President Joe Biden came up with the SAVE plan to provide relief to students from the burden of debt. This plan was created to deal with the student loan crisis, and under this, students got an opportunity to repay the loan according to their income and family. According to the SAVE plan, students had to pay only a certain part of their monthly income to repay the loan. If they continued to make this payment for 20-25 years continuously, the remaining loan would be waived off.

This scheme was especially beneficial for low-income students. Many students’ monthly payments were reduced significantly and some were even eligible for loan waiver. Since the scheme was launched, in about 10 months, more than 80 lakh students had enrolled in it and about 4 lakh students also got the benefit of loan waiver. However, soon questions started being raised about this scheme and many states started registering opposition to the SAVE plan.

In July 2023, a federal appellate court put a stay on the scheme, putting a brake on the success of the SAVE plan. Republican Party-led states challenged the scheme in court, calling it illegal. They said that the executive branch does not have the right to implement such a large loan waiver scheme without the approval of Parliament. The Supreme Court has also refused to lift the stay, leaving the future of the scheme in limbo and millions of students uncertain about their future.

Can I still get the benefit of loan waiver?
Although the SAVE plan is on hold, some students still have other options open for loan waiver. Let’s find out which students can still get relief.

Students who fall victim to fraudulent schools: If a student has studied in a school that has misled or defrauded them, they can still apply for loan waiver. This is called a ‘borrower defense claim’. If a student can prove that their school made false promises or defrauded them, they can benefit from loan waiver. Many students have already received loan waivers under this scheme. Despite the ban on the SAVE plan, this scheme is still in force.

Public Service Loan Forgiveness (PSLF) Program: If a student is working in public sectors such as education, healthcare, firefighting and military, he/she may be eligible for loan forgiveness under the ‘Public Service Loan Forgiveness (PSLF) Program’. Under this program started in 2007, students working in the public sector can get their remaining loan forgiven after making 120 eligible payments (about 10 years). Initially, this program had a lot of problems, but the Biden administration has made improvements in it. Due to these improvements, the loans of about 1 million public employees have been forgiven. This program is still going on and is giving relief to people playing an important role for the country.

Students with Disabilities: Students with disabilities may also be eligible for loan forgiveness. The Biden administration has forgiven $14.1 billion for about 548,000 students with disabilities who cannot work due to their disability. This also includes many retired soldiers. This scheme is still ongoing and provides relief to students who cannot repay their loans due to their illness.

Temporary relief to students during legal proceedings: Although the SAVE plan is on hold, one thing is clear that while the case is being litigated, interest will not be charged on federal loans. This is a relief for students who fear their debt will increase due to interest. The Department of Education has assured students that they will be informed as soon as there is any new update in this matter.

What will be the impact of the Supreme Court’s decision?
The Supreme Court’s decision to uphold the SAVE plan is a major setback for millions of Americans who were hoping for loan forgiveness. If the legal challenge succeeds and the plan is completely repealed, many students will have to resort to traditional methods to repay their loans. This means they will have to make higher monthly payments than before. This could worsen the student debt crisis and make it harder for students to afford their needs such as housing and healthcare.

While this legal battle plays out, the Biden administration is looking at other ways to provide relief to students. These include simplifying existing plans and removing administrative barriers that previously prevented students from receiving loan forgiveness. For example, significant improvements have been made to the PSLF program, and the Department of Education is making greater efforts to reach students who are eligible for loan forgiveness due to disability or fraud.

However, the ban on the SAVE plan and the rejection of President Biden’s $400 billion loan forgiveness proposal make it clear that the path to large-scale student loan forgiveness is not easy. Although the public is in favor of loan forgiveness, its opponents, mainly conservative groups and the Republican Party, say that it will increase the burden on taxpayers.