Vice President Kamala Harris has reaffirmed her commitment to advocate for student debt forgiveness following the Supreme Court’s decision to not reinstate the Biden administration’s recent loan cancellation plan.
A coalition of Republican states has taken legal action against the federal government regarding the Saving on a Valuable Education (SAVE) plan, claiming it could incur costs of at least $475 billion over the next decade. Meanwhile, the Congressional Budget Office estimates the plan’s potential cost at $276 billion.
The Supreme Court recently declined to lift an injunction from the 8th U.S. Circuit Court of Appeals, which temporarily halts President Biden’s proposed plan—initially aimed at canceling up to $20,000 in student debt for many borrowers.
In a brief unsigned order on Wednesday, the Court expressed its expectation that the 8th Circuit will deliver a more detailed decision on the SAVE plan soon. During his 2020 campaign, student loan forgiveness was a pivotal promise, and Harris has committed to continuing this mission if elected in the upcoming November elections.
“@POTUS and I have canceled nearly $170 billion in student debt for around 5 million Americans,” Harris shared on X, previously known as Twitter, on Wednesday evening. “We’re also defending our SAVE Plan, which has reduced payments for millions. We’re committed to building an economy that works for everyone.”
The SAVE plan aims to alleviate the financial burden on borrowers by halving the required monthly payments on federal loans from 10% to 5% of one’s discretionary income. Additionally, individuals earning under 225% of the federal poverty line—approximately $32,800 annually—would be exempt from loan payments. Those with loan balances of $12,000 or less could have their debt wiped clean after a decade of on-time payments.
Earlier this summer, the 8th Circuit Court issued an injunction against the SAVE plan, which was briefly lifted when the 10th Circuit allowed the Department of Education to proceed with reduced monthly payments. However, the 8th Circuit later reinstated the hold.
The Biden administration reported in April that nearly 8 million people had signed up for the SAVE plan, with 4.5 million borrowers benefiting from $0 monthly payments.
Despite some legal challenges, the administration has made strides in loan forgiveness, recently announcing the cancellation of $1.2 billion for borrowers in public service roles. To date, the Department of Education estimates that around $167 billion in loans have been forgiven for over 4 million individuals under Biden’s initiatives.
Anna Moneymaker/Justin Sullivan