SAVE Lawsuit Hearing Update

Hey folks, we just got done with the SAVE lawsuit hearing. We've got kind of a team lunch going on. We've got a lot of the SLP team members that we were listening to for this. So this SAVE lawsuit hearing was the opportunity for the 8th Circuit to ask a bunch of questions on the SAVE plan. And they basically were trying to figure out, you know, what exactly does this mean? Like, what do you want us to do, plaintiffs? Is the SAVE plan at risk? You know, how much of it is all at risk? So I think that here's a couple takeaways from the SAVE lawsuit hearing, just initially. So pay and repay and save. And anything that was built from the ICR statute is all at risk. So the court kept saying over and over again, repayment, repayment, repayment. So they kept saying, well, the ICR statute requires repayment. It requires you to pay back your loans with principal and interest. And Congress never intended forgiveness via the statute. So it's pretty clear that the 8th Circuit, which is a very, very conservative appeals court, really is very skeptical that the ICR statute allows for the pay plan and the repay plan and the SAVE plan to grant forgiveness at all. Which is really shocking because this has been in place since the 2010s for repay and the pay plans. And so this is like a big deal. This is something borrowers are going to have to pay close attention to. Now, the 8th Circuit is going to be issuing a ruling in due course. They said they would be issuing a ruling soon. So we're going to have to be monitoring this. But what this really does mean is that some of the plans, like the pay plan, like the formerly repay plan and the SAVE plan, are very much all at risk, at least at this court's level. So this is the appeals court. This is a decision that whatever comes out of this appeals court, it's going to be appealed to the Supreme Court. And the Supreme Court is ultimately going to have the final say about this. The only exception would be if you had a Trump victory, it might be decided at the 8th Circuit level because then the government might not opt to appeal the decision. And so in that case, it could be a more extreme ruling that would stand that would repeal the ICR statute potentially, which is where the SAVE plan, the pay plan, the repay plan are derived from. If you had a Kamala Harris victory, then it would definitely get appealed to the Supreme Court. And the hope there would be that if they did strike down the ICR statute, that the pre-COVID status quo would potentially be reinstated. And that would be the pay plan, the repay plan. That would be the hope. And it really does seem like this court is prepared to take a very extreme view of the ICR statute and to strike down a lot of things that have been unchallenged for many years, which is pretty shocking. But then again, there's been a lot of shocking court cases these days, right? So we at TMSLP are going to be following this for you. If you have any questions about the SAVE court hearing and the implications of it, what it means for you, just keep in mind that if you're on the pay plan currently, nothing is taken away as of right now, right? Nothing is being eliminated at this moment. And so keep making your pay payments, keep getting progress towards forgiveness. Most people that are on the pay plan would be able to switch to the IBR plan and still get forgiveness, albeit at higher payments and a longer period of time. And people that are going for PSLF would be able to switch over mostly to the IBR plan and still get credit for PSLF. People that have their first student loan after 2014 would be able to switch over to the new IBR plan, which is basically the same thing as the pay-as-you-earn plan. And people that are on the SAVE plan or were on the SAVE plan forbearance currently, if all that stuff was eliminated, then you'd have to make the decision between switching to IBR or switching to one of the standard or extended plans or even potentially refinancing. But if you're in the SAVE plan forbearance currently, you've got 0% interest that lasts for another six months. And that very much depends on the election. But the SAVE plan forbearance lasts for a while at least, even though it doesn't count for forgiveness currently. And we have no choice but to continue to wait on the final ruling from these lower courts, which very likely will get appealed to the Supreme Court. So thanks for following Student Loan Planner. We'd love to hear your questions. Put it in the comments. And our team is going to go back to work analyzing the notes we took from this court hearing so that you don't have to listen to these really boring, terrible court hearings so that we can explain what it means for you. So thank you so much for following Student Loan Planner and put your comments below. Thanks for watching.