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The Biden administration calls it a “student loan safety net.” Opponents call it a backdoor attempt to make college free. And it could be the next battleground in the legal fight over student loan relief.
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HOW IS BIDEN’S PLAN DIFFERENT? As part of his debt relief plan announced last year, Biden said his Education Department would create a new income-driven repayment plan that lowers payments even further. It became known as the SAVE Plan, and it’s generally intended to replace existing income-driven plans.
Borrowers will be able to apply later this summer, but some of the changes will be phased in over time.
Right away, more people will be eligible for $0 payments. The new plan won’t require borrowers to make payments if they earn less than 225% of the federal poverty line — $32,800 a year for a single person. The cutoff for current plans, by contrast, is 150% of the poverty line, or $22,000 a year for a single person.
Another immediate change aims to prevent interest from snowballing.
As long as borrowers make their monthly payments, their overall balance won’t increase. Once they cover their adjusted monthly payment — even if it’s $0 — any remaining interest will be waived.
Other major changes will take effect in July 2024.
Most notably, payments on undergraduate loans will be capped at 5% of discretionary income, down from 10% now. Those with graduate and undergraduate loans will pay between 5% and 10%, depending on their original loan balance. For millions of Americans, monthly payments could be reduced by half.
Next July will also bring a quicker road to loan forgiveness. Starting then, borrowers with initial balances of $12,000 or less will get the remainder of their loans canceled after 10 years of payments. For each $1,000 borrowed beyond that, the cancellation will come after an additional year of payments.
For example, a borrower with an original balance of $14,000 would get all remaining debt cleared after 12 years. Payments made before 2024 will count toward forgiveness.
HOW DO I APPLY? The Education Department says it will notify borrowers when the new application process launches this summer. Those enrolled in an existing plan known as REPAYE will automatically be moved into the SAVE plan. Borrowers will also be able to sign up by contacting their loan servicers directly.
It will be available to all borrowers in the Direct Loan Program who are in good standing on their loans.
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The Biden administration formally finalized the rule this month. Conservatives believe it’s vulnerable to a legal challenge, and some say it’s just a matter of finding a plaintiff with the legal right — or standing — to sue.
Forgiveness didn’t happen, and while there’s a tenuous argument to be made that the way Biden went about it made it easier for the Supreme Court to block it, the Supreme Court was always gonna block it. There’s things to get mad at Biden about, sure. This ain’t one. Progressives were clamoring for it, centrists were clamoring against, and Biden listened to progressives. I’m not going to fault him for doing something progressives wanted.
Centrists argued at the time that it was just a bandaid and didn’t solve the whole problem of college being too expensive, and I completely agree. However, centrists are fond of saying to not let the perfect be the enemy of the good and that politics is the art of the possible whenever they successfully block progressive policy, so demanding perfection out of the gate when they knew perfection would never get past Manchin, let alone Republicans, strikes me as rank hypocrisy in the service of blocking something they didn’t want to do.
So, that’s where I’m coming from on that.
Here’s how that informs my opinion regarding this:
Biden had a specific contingency plan ready to go. I like the plan, not because it’s perfect. It’s not. It’s more complex than the previous forgiveness, and complexity is attack surface. But I’m not demanding perfection. Centrists were and I hope they’ve stopped. I know that this is a situation where Biden is constrained by the limits of what he can do via executive order, and this is real relief.
From an optics standpoint, he’s in a position that he hasn’t been for most of his presidency. He’s in direct, unobstructed opposition to a group of corrupt unabashed conservatives who are violating existing judicial norms and ruling in bad faith. One of the major (valid) criticisms of Democrats in the past few election cycles is that they’re too willing to just let conservatives ignore norms and run roughshod over everything, while never fighting back in kind. But the worst the court can really do to Biden is rule against this and demonstrate that they’re both illegitimate and hate the people that Biden is openly fighting for, or rule in his favor or decline the case, and hand Biden a victory he can crow about. But he needs to crow about it if he wins, and have another contingency ready to go immediately if he doesn’t. We need to make some fucking noise about this.
But the best part of this is that his own party can’t get in his way. Manchin can’t do shit. There’s no bill to split and then kill the progressive portion of. Biden gets to be the guy he claimed to be when he was running. He’s in a position to fight like hell for young people, and provide a counterexample for people who don’t vote because they don’t think anyone’s fighting for them.
You want to get young people to the polls, don’t scold them. Sell this plan. If it fails, sell the contingency. Show them an octogenarian fighting for them against blatantly unfair bullshit and fighting anyway. Against a believable proxy for the people you want them voting against instead of some guy in your own party you can’t make too mad because reasons.
The problem is people now know that no matter what any president says the arcane machinations of Washington will likely prevent things from happening, at least on a timescale that humans can comprehend.
Demonstrably fighting for a concrete plan with obvious benefits is a big step up from what democrats have been doing.
I wouldn’t call any plan that depends on anything but a 100% Democratic takeover of the Legislature and packing of the Supreme Court “concrete.”
If the courts strike it down, they demonstrate yet again that they’re illegitimate and partisan, and Biden gets to counter with another plan and keep fighting. If they don’t strike it down, students get relief. Biden is doing what he can with what he has. He’s fighting conservatives. He’s doing what Democrats should be doing. His own party can’t stand in the way for fucking once. He’s punching right instead of standing there and meekly taking it while his own party punches left.
That’s the problem: They know they’re illegitimate and partisan and don’t care. And Biden can’t do anything about it. And they’re laughing all the way to the private yacht their billionaire buddy bought them.
He can keep trying. That’s more than the party usually does.
If the court wants to keep making a convincing case that they need more justices and ethics reform, that’s their risk to take.
That doesn’t mean Democrats get to give up and stop trying.
I hope you can see how that’s little consolation to someone with significant student loan debt
Would giving up be preferable?
never going to happen. judicial nominations to the supreme court require congressional oversight.