STUDENT NEWS

Student Loan Trend Watch: Hurdles for Federal Loan Relief

By: Nancy Bilyeau · June 27, 2024 · Reading Time: 2 minutes

Two court rulings are challenging one of the Biden administration’s programs designed to deliver federal student debt relief, and a new survey lists schools that are doing the best job of delivering financial aid to their students. Here are the latest developments in the world of student debt.

Hurdles for SAVE

On Tuesday, judges in Kansas and Missouri issued injunctions against the Department of Education’s Saving on a Valuable Education (SAVE) plan, which is designed to lower payments for some federal student loans borrowers based on their household income and family size.

The legal challenges argued that the administration doesn’t have the authority to forgive student debt on the scale the SAVE plan allows, saying such widespread loan forgiveness can only be authorized by Congress.

For now, the injunctions that were issued only halt the part of the SAVE plan scheduled to take effect in July, including lowering the possible minimum amount owed from 10% of discretionary income to 5% for qualifying borrowers. The injunction from Missouri also means the Department of Education must pause in issuing debt forgiveness for SAVE enrollees that are based on how long borrowers have been paying off their debt.

This does not mean the SAVE plan, created nearly a year ago, is shut down entirely. Borrowers enrolled in SAVE should continue to make payments based on their SAVE formulas, and new borrowers can still enroll in the plan, according to a statement posted on the Federal Student Aid website .

The White House announced that the Justice Department will “vigorously defend” the SAVE student loan program. Over 8 million people are currently repaying federal student loans through SAVE, per the White
House
.

Other income-driven federal student repayment programs such as Public Student Loan Forgiveness are unaffected by the two court cases.

What Schools Offer Best Financial Aid Packages?

There was big news outside of the world of SAVE as well. The Princeton Review released its ranking of colleges based on how much financial aid is awarded and how satisfied students are with the packages they received. The 2024 report is based on data from its surveys of administrators and students at more than 650 colleges in the 2023-24 school year.

For public schools, the top 3 schools ranked for financial aid are:

1.    University of Virginia

2.    University of North Carolina Chapel Hill

3.    New College of Florida

For private schools, the top 3 schools ranked for financial aid are:

1.    Yale University

2.    Vassar College

3.    Williams College

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