Biden’s Student Debt Plan Is in Limbo. Confused? Here Are Some Answers.

The Supreme Court on Wednesday kept a temporary freeze on the Biden administration’s new student loan repayment plan, which means monthly bills for millions of borrowers will also remain on hold.

The SAVE program, which ties a borrower’s loan payments to income and household size, is more affordable than the income-driven repayment plans that came before it. The program would have cut many borrowers’ bills by as much as half.

Given its higher costs, two separate groups of Republican-led states filed legal challenges in the spring, seeking to upend the program. A flurry of legal activity followed, disabling pieces of the repayment plan, and a federal appeals court later granted a request to temporarily suspend the program until the lawsuits were resolved. The Supreme Court’s order on Wednesday refused the Biden administration’s emergency request to lift that hold.

That keeps the eight million borrowers who are enrolled in SAVE in a state of financial uncertainty. They don’t know whether the plan’s terms will change, or if the program will survive at all. Many borrowers may find it difficult to plan a monthly budget until the legal challenges are resolved.

Here are some answers to questions borrowers may have.

Does this mean I don’t currently have to make payments?

Borrowers enrolled in SAVE will continue to have their payments frozen until the legal situation changes, the Education Department said on its website.

The pause began in July, after the U.S. Court of Appeals for the Eighth Circuit in St. Louis granted a request by a group of Republican-led states for an administrative stay that blocked the plan.