People enrolled in the Saving on a Valuable Education Plan might be forced into alternative loans with significantly higher monthly rates, CNBC reported on Friday.
President-elect Donald Trump made clear on the campaign trail he was not a fan of the SAVE Plan and experts are assuming that it will go away when Trump takes office next year.
Betsy Mayotte, president of The Institute of Student Loan Advisors told the outlet, "For those worried about SAVE going away, I think it probably will, unfortunately."
In July, a federal appeals court blocked President Joe Biden's administration from seeking to institute a new student debt relief plan that aimed to lower monthly payments for eligible borrowers. Among other incentives, the plan allowed those whose original principal balances were $12,000 or less to have their debt forgiven after 10 years.
With SAVE temporarily suspended, the Biden administration has put SAVE enrollees into an indefinite administrative forbearance in which they don't owe anything on their debt.
Malissa Giles, a consumer bankruptcy lawyer in Virginia said those borrowers enrolled in SAVE should assume the plan will end.
The incoming administration is "not bound by the position of the prior administration," Giles said. If the plan goes away, enrollees will likely see their monthly payments return to their previous levels, in some case almost double according to Giles.
"I cannot imagine the stress that will be put on folks," she added.
Republican-led states argued the Biden administration used SAVE as a way to circumvent the Supreme Court ruling in 2023 that blocked its sweeping loan cancellation plan. Supporters of the plan contend SAVE gave student borrowers more affordable repayment options, noting that almost 30% said they have had to go without food, medicine, or other essentials, according to a recent survey by the Consumer Financial Protection Bureau.
"What challenges are people going to [face] when their payments double? It's a crazy hot mess," Giles said.
James Morley III ✉
James Morley III is a writer with more than two decades of experience in entertainment, travel, technology, and science and nature.
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