For two years, Missouri has led the effort in preventing the Biden Administration from providing sweeping student loan forgiveness. The latest lawsuit claims that the U.S. Education Secretary is “unlawfully” trying to mass cancel hundreds of billions of dollars in loans.
Michele Shepard Zampini, with the Institute for College Access and Success, sheds some insight into why the Missouri Attorney General has filed the lawsuits.
“It seems to come down to basically it’s too generous to borrowers and therefore it is too expensive to taxpayers, which I will caveat by saying student loan borrowers are also taxpayers. And so, I think it’s important to complicate that as well,” she said.
The latest forgiveness effort is based on another federal statute the Biden Administration says gives them the authority to forgive loans. Missouri Solicitor General Josh Divine said that President Joe Biden is attempting to cancel student loans in “direct defiance” of last year’s Supreme Court ruling.
Uncertainty is how the institute would describe the attempts to forgive student loan debt and attempts to rule it unconstitutional. Zampini told Missourinet that Congress is not able to legislate on the issue, therefore the president has taken matters into his own hands.
She is hearing the cries from some borrowers who are demanding clarity on the issue.
“Millions of people who are saying ‘I just need to know what my monthly budget looks like,” Zampini said. “I need to know how this payment amount fits in. I just need clarity,’ I think it is really important to keep centering that.”
One student loan forgiveness effort, the so-called SAVE Plan, is being challenged at the appeals court level by Missouri. It aims to cut monthly payments and accelerate the path to having loans forgiven. A federal judge in St. Louis blocked the plan earlier this summer, and that ruling was upheld this month by the Eighth U.S. Circuit Court of Appeals.
Regarding the SAVE Plan, Divine claimed that it reduces the monthly amount to zero.
“I think it’s an understatement to say that the changes to the payment amount would reduce the monthly payment amount,” he said. “It, for the vast majority of people on the SAVE Plan, it turns the amount to zero. That’s not just ‘hey we’re going to have a lower amount,’ that is ‘you never have to pay anything back ever again.’ That’s loan forgiveness.”
Enrollees in the SAVE Plan have had their monthly budgets affected by the start-stop lawsuits challenging its constitutionality. Zampini said that she understands the frustration borrowers are feeling, including those from Missouri.
“It is really unfair and really a shame to expect folks to just kind of ride this out and ride the wave and figure out for themselves what they’re supposed to do and how they’re supposed to budget without providing any certainty or any clarity going forward,” she said.
The eight million borrowers who are enrolled in the SAVE Plan have been placed in an interest-free forbearance period, during which they are not required to make monthly payments.
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