Democrats Seek to Turn Biden’s ‘Most Affordable’ Student Loan Relief Program Into Law

Senate Democrats are trying to codify President Joe Biden’s latest federal student loan forgiveness plan and protect it from being overturned under future administrations.

President Biden’s program, dubbed SAVE, has enrolled over 7.7 million people since it launched in August. Like the existing income-driven repayment (IDR) option it replaces, SAVE can provide an affordable monthly payment based on income and family size before the eventual discharge of the remaining balance.

The enrollees include 4.5 million borrowers whose monthly bill was lowered to zero dollars, in addition to about 150,000 borrowers who have had their entire debt wiped out.

Ahead of the 2024 elections, Democrats are mounting an effort to shield SAVE from a potential rollback by future administrations.

In December, Rep. Dan Goldman (D-N.Y.) introduced the Codifying SAVE Plan Act, a one-page bill that would do exactly what its name implies. The proposal now has a companion bill in the Senate, sponsored by a group of 14 Democrat senators.

“The SAVE plan is the most affordable student loan repayment plan in history and a lifeline for millions of borrowers—allowing them to live without the burden of exorbitant monthly payments hanging over their heads,” Sen. Kirsten Gillibrand (D-N.Y.) said in a statement on Tuesday. “The Codifying SAVE Plan Act would ensure that the SAVE Plan remains in place and safeguards a much-needed path to federal student loan forgiveness.”

The legislative effort is endorsed by the nation’s most powerful teachers unions, the American Federation of Teachers (AFT) and National Education Association (NEA).

“This bill has the AFT’s full support,” said AFT President Randi Weingarten. “It would create the most affordable repayment options ever and would make a college degree more accessible, affordable and achievable—not a liability that makes life harder.”

The NEA also issued a statement supporting the bill.

“NEA is proud to support the Codifying SAVE Plan Act to guarantee this plan is protected and available for every student,” said Marc Egan, NEA’s director of government relations.

The bill is likely to pass in the upper chamber where Democrats hold a 51–49 majority, but its fate in the lower chamber remains unclear.

Rep. Virginia Foxx (R-N.C.), chairwoman of the House Education Committee, is among the most outspoken critics of SAVE, which she denounced as a “desperate scheme” to curry favor and buy votes ahead of the next election.

“Don’t be fooled by this administration’s so-called free college agenda,” she said in February. “It means less money in the pockets of hardworking taxpayers, more debt, and a continuing decline of an already failing student loan system.”

SAVE Faces Legal Hurdles

Described by U.S. Secretary of Education Miguel Cardona as the single most generous repayment plan ever offered, SAVE has faced challenges since its debut. Its opponents argue that it is just another overreach by the Biden administration to implement large-scale student loan cancellations after the U.S. Supreme Court shot down the first attempt.

Last week, a coalition of 11 Republican-led states filed a lawsuit against the Biden administration, seeking a temporary injunction to block SAVE.

The Republicans, led by Kansas Attorney General Kris Kobach, argue that SAVE is too similar to the original plan the Supreme Court declared as unlawful in 2023. In a 6–2 decision, the high court ruled that President Biden had overstepped his authority by trying to use the COVID-19 public health emergency as an excuse to enact a plan that would cost the country $400 billion in 30 years.

“In completely brazen fashion the president pressed ahead and implemented another version of the student loan forgiveness program,” Mr. Kobach said.

“President Biden is defying the ruling of the United States Supreme Court while also seizing power from Congress,” he added. “Fortunately, in America, we live in a constitutional republic and the courts can strike down an illegal or unconstitutional executive act. That is what we are asking the court to do in this case, and we look forward to seeing the president’s attorneys in court.”

The Education Department declined to comment on the lawsuit.

Depending on the outcome of this legal battle, borrowers already enrolled in SAVE could be affected.

It is possible that a judge will dismiss the challenge altogether and rule that the SAVE plan was constructed on a different legal basis than the president’s original student loan debt relief plan.

If the judge rules in favor of the challengers, the program could be blocked for new applicants with its current enrollees being grandfathered in, although it’s also possible that the entire SAVE program could be struck down, sending borrowers back into REPAYE, an older IDR plan that SAVE had replaced.

The last scenario could result in millions of borrowers seeing a higher monthly bill, since REPAYE was less generous than SAVE.