A new legal filing asks a federal judge to pause the forced transfer of millions of student-loan borrowers off of SAVE, the income-driven repayment plan that the Trump administration eliminated in March.
On Tuesday night, the law firm Public Goods Practice filed a motion in a US District Court seeking to block borrowers enrolled in SAVE from being automatically moved to a new, more expensive repayment plan while their broader lawsuit continues.
The case, filed in March, challenges the Department of Education’s decision to eliminate SAVE, a Biden-era plan that reduced monthly payments and shortened the timeline for debt relief.
The motion argues that legal procedure requires the department to make the benefits of REPAYE, a precursor to SAVE, available to borrowers and to pause forced transfers to a new plan while the case proceeds.
A Department of Education spokesperson disputed the merits of the argument and recommended that borrowers enroll in “a lawful repayment option,” such as the new Repayment Assistance Plan, which will become available on July 1.
Also beginning July 1, borrowers enrolled in SAVE will start receiving notices from their servicers on their 90-day timeframe to transfer to a new plan.
If they do not voluntarily switch, those borrowers will automatically be placed in the standard repayment plan or the new tiered plan, both of which are the most expensive options.
Austin Hinkle, a managing partner at Public Goods Practice, said he’s pushing to pause that transfer before borrowers reach the deadline. “Once borrowers start getting transferred over, injuries for lots of borrowers could start to happen right away,” Hinkle said, referring to the higher monthly payments borrowers would face under new repayment plans.
Democratic lawmakers have previously pushed the department to give borrowers more time to transition to a new plan.
They wrote in an April letter that “borrowers deserve to have the time, critical information, and support necessary to successfully enroll in another affordable repayment plan and continue to pay down their loans.” Have a story to share about student loans?
Contact this reporter at asheffey@businessinsider.com.
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