United States President Donald Trump's administration announced efforts to end a Biden-era student loan debt repayment plan that has helped millions of borrowers pay debt.
The Department of Education announced on Tuesday plans to stop what it called Biden's "illegal" Save plan. This is the Saving on a Valuable Education income-driven repayment program that currently has over 7 million borrowers.
Ending the Biden-Era Save Program
The department said in a press release that it plans to stop all new Sve enrollments, deny any pending applications, and transition existing borrowers into alternative repayment plans. If the U.S. district court for the Eastern District of Missouri approves the settlement, borrowers will have a limited time to choose a new option before the department automatically transitions them out of the program.
In a statement, education under-secretary Nicholas Kent said that for four years, the Biden administration sought to "unlawfully shift student loan debt onto American taxpayers." He added that the Trump administration is now righting this wrong and is working to bring an end to the "deceptive scheme," according to The Guardian.
Additionally, Missouri's Republican attorney general, Catherine Hanaway, said that her office had fought for hardworking Americans who she claimed were being preyed upon by Biden administration bureaucrats.
She added that unilaterally saddling taxpayers with someone else's Ivy League debt ignores congressional authority and is clearly unlawful. The settlement comes as the Save program lowered some borrowers' monthly payments to as little as 0$, cut required payments on undergraduate loans by half, and offered early forgiveness for those who had low balances.
On the other hand, many critics argue that the settlement would only increase costs for borrowers, particularly those who are already struggling with economic uncertainty. The managing director of advocacy at the National Consumer Law Center, Abby Shafroth, said that ending the Save plan would leave borrowers without access to a clear and affordable alternative, CNN reported.
A Reckless and Shortsighted Plan
She added that this would result in the creation of even more needless confusion, uncertainty, and financial stress for millions of Americans. Shafroth argued that the proposal is reckless and short-sighted.
The Biden-era Save program has been on hold since February, after the 8th U.S. Circuit Court of Appeals sided with Missouri and many other red states that challenged the former president's plan.
Now, a judge will have to sign off on the proposed settlement before it can move forward. On top of this, the Supreme Court previously struck down Biden's effort at broad student loan forgiveness in 2023, saying it was an unlawful exercise of presidential power, as per NBC News.
