Handing the Biden administration an unexpected win amidst a legal back-and-forth, a court over the weekend agreed to let the Education Department continue implementing the final phases of aThis comes after the department had already begun the process to put 3 million borrowers into a payment pause, a move officials said was necessary to comply with the court's initial ruling last week to halt the payment cuts.
In addition to offering the lowest monthly payment for most borrowers, the plan also shields borrowers from unpaid interest accrual, one of the largest additional fees that borrowers face on their loans. Unpaid interest is forgiven so long as qualified borrowers make their monthly payments on the loan - even if their required payment is $0. About 4.5 million borrowers enrolled in the SAVE Plan qualify for $0 monthly payments because they make minimum wage or less.
Overall, following the changes has been challenging, said Michael Lopez, a 33-year-old social worker and high school wrestling coach who lives in Anaheim, California. Lopez took on roughly $200,000 to get an undergraduate and then a master's degree in social work, putting him on the high end of the spectrum of student debt carried by Americans.
Lopez and many other borrowers were disappointed when Biden couldn't follow through on his pledge to cancel $10,000 to $20,000 in debt last year after the U.S. Supreme Court overturned his sweeping debt relief policy for 43 million Americans.