(UnitedVoice.com) – The Supreme Court shot down President Joe Biden’s student loan forgiveness plan in the last session. That put the POTUS back at square one regarding one of his biggest campaign promises. Shortly after the justices ruled his plan could not stand, he announced rule changes to help millions discharge their loans. A new report indicates the plan is pricey.
On June 30, the president announced new action to help Americans who are being crushed under the weight of student loan debt. The administration was changing rules to make it easier for some people to discharge their debts and to make it easier for others to repay them at an affordable rate. On the same day, the administration finalized the repayment plan called the Saving on Valuable Education (SAVE) plan.
The SAVE plan increased the income exemption for loan repayment from 150% to 225% of the poverty line. That would drive down the amount borrowers have to repay each month, making it more affordable. The plan also excludes spousal income if the couple is married and files separately. Finally, it eliminates the remaining interest for unsubsidized and subsidized loans after the establishment of a payment plan.
The plan is going to cost the American people hundreds of billions of dollars. That’s because the administration is also going to write off more loans by using a broader set of requirements to do so. The University of Pennsylvania’s Penn Wharton Budget Model projects it will cost $475 billion, and the Congressional Budget Office thinks it’ll come with a $230 billion price tag.
There’s also the very real possibility that it won’t survive a challenge at the Supreme Court. The justices have made it pretty clear that Biden cannot unilaterally forgive student loans for millions of Americans. And yet, here he is, trying to do exactly the same thing all over again, but with a twist.
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