The Student Aid and Fiscal Responsibility Act (SAVE) Plan, which was enacted in 2010, provides federal direct student loans to undergraduate and graduate students. The SAVE Plan's purpose is to help students and families finance the cost of higher education. The plan has been met with mixed reactions, with some borrowers expressing concerns about the implications of the court stay and its impact on their repayment obligations.
Court Stay
In 2017, a federal court issued a preliminary injunction that blocked the implementation of the SAVE Plan. The injunction was issued in response to a lawsuit filed by a group of borrowers who argued that the plan was unfair and would harm their finances. The court ruled that the SAVE Plan violated the Administrative Procedure Act (APA) because the Department of Education (DOE) failed to provide adequate notice and opportunity for public comment before implementing the plan.
Implications for Borrowers
The court stay has significant implications for borrowers who have taken out federal direct student loans under the SAVE Plan. The stay means that the DOE cannot collect on these loans or take any other enforcement actions against borrowers until the court issues a final ruling on the case. This means that borrowers are not required to make payments on their SAVE Plan loans while the court stay is in effect.
Uncertainty
The court stay has created uncertainty for borrowers who have taken out SAVE Plan loans. It is unclear when the court will issue a final ruling on the case, and it is possible that the SAVE Plan could be permanently blocked. If the SAVE Plan is blocked, borrowers may be required to repay their loans under different terms and conditions than they originally agreed to.
Options for Borrowers
Borrowers who have taken out SAVE Plan loans have several options available to them while the court stay is in effect.
- They can continue to make payments on their loans, even though they are not required to do so.
- They can contact their loan servicer to request a forbearance or deferment, which will allow them to temporarily stop making payments.
- They can wait until the court issues a final ruling on the case before taking any action.
Borrowers should carefully consider their options and consult with a financial advisor or loan counselor before making any decisions.
Conclusion
The court stay on the SAVE Plan has created uncertainty for borrowers who have taken out federal direct student loans under the plan. Borrowers have several options available to them while the court stay is in effect, and they should carefully consider their options and consult with a financial advisor or loan counselor before making any decisions.
Kind regards,
M. Davis
