The 8th U.S. Circuit Court of Appeals blocked former President Joe Biden’s Saving on a Valuable Education (SAVE) plan, which would have transferred student loan debt from borrowers to taxpayers.
CNBC reported that the decision by the appeals court came after “seven Republican-led states” filed a lawsuit against the Department of Education’s SAVE plan and “argued” that Biden had no “authority to establish” the SAVE plan and that he had been “trying to find a roundabout way to forgive student debt.”
The GOP states argued that Biden, with SAVE, was essentially trying to find a roundabout way to forgive student debt after the Supreme Court blocked his sweeping debt cancellation plane in June 2023.
“The Saving on a Valuable Education (SAVE) Plan is the newest income-driven repayment (IDR) plan,” the Federal Student Aid website says. “Like other IDR plans, the SAVE Plan calculates your monthly payment amount based on your income and family size. In addition, the SAVE Plan has unique benefits that will lower payments for many borrowers.”
The University of Pennsylvania’s Penn Wharton Budget Model reported that it was estimated that the SAVE Plan would “incur a net cost of $475 billion over the 10-year budget window.”
The Penn Wharton Budget Model added:
About $200 billion of that cost will come from payment reduction for the $1.64 trillion in loans already outstanding in 2023. We estimate that about 53 percent of the current loan volume will move to SAVE after it goes active in July 2024, implying that about $869 billion will be subject to enhanced subsidies under SAVE.
Breitbart News’s Nick Gilbertson previously reported that in February 2024, while over 150,000 people who had taken out student loans were informed “that all or part of their” student loans would be forgiven, the SAVE Plan was “really a transfer of the debt to the American taxpayer.”
This came after the Supreme Court had previously “struck down” Biden’s student loan forgiveness plan in June 2023, “ending a $430 billion debt writeoff.”
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