Biden’s SAVE Act Committed Mortal Sin

Letter to Ephesians: Biden’s 2d attempt at cancelling massive student loan debt, aka The SAVE Plan, was struck down by the 8^th Circuit, because only Congress can give away taxpayers’ money in gobs without its ok. So, what do borrowers do now? 

The appellate court’s ruling follows the US Supreme Court’s striking down in Biden v. Nebraska Joe’s earlier mass loan forgiveness effort. The 6-3 decision in 2023 was clear enough in saying the Administratioin’s relying on the “Heroes Act” to wave off huge amounts of student loan debt for millions of borrowers violated, not just the law relied upon (which did allow for modest loan modifications), but the High Court’s Major Questions Doctrine. Under that long standing rule, major economic or political decisions need clear authorization from Congress to pass muster. And concluded the appellate court, Biden’s second bite at the forgiveness apple via a regulatory order by the Dept. of Education was no less a mortal sin because it would again essentially cost Uncle Sam hundreds of billions of dollars via an agency’s dictate.

The more cynical would say the Biden two-timing give-away was a ploy to buy votes leading up to the 2024 presidential election. Perish the thought. But what is undeniable is the entirely predictable pain the once gleeful student borrowers will now likely have to endure. While new applications will be subject to denial outright, the millions enrolled in SAVE will have to await guidance on next steps, including on how to revert to the old repayment plan or how to switch to other repayment options, most of which are income driven and entail higher interest rates.

Davd Soul