A new legal filing urges a federal judge to halt the forced transfer of millions of student loan borrowers from the SAVE repayment plan to more expensive options. The motion, filed by Public Goods Practice, seeks to pause these transfers while a broader lawsuit challenging the elimination of the SAVE plan proceeds.
The SAVE plan, an initiative from the Biden administration, offered reduced monthly payments and a faster path to debt forgiveness. The Trump administration eliminated SAVE in March, prompting the current legal challenge.
The law firm argues that current legal procedures necessitate keeping borrowers on the REPAYE plan, a precursor to SAVE, and pausing any forced transitions until the case is resolved. They contend that borrowers could face immediate financial harm from higher payments once transferred.
A spokesperson for the Department of Education contested the legal basis of the motion, advising borrowers to enroll in alternative repayment options like the new Repayment Assistance Plan, set to be available July 1. Starting the same date, borrowers in SAVE will receive 90-day notices, after which they will be automatically moved to either the standard or a new tiered repayment plan if they do not voluntarily switch.
Democratic lawmakers have previously called for more time and support for borrowers navigating these transitions, emphasizing the need for critical information and assistance to enroll in affordable plans.
