This blog explores the challenges of student loan debt relief and potential solutions, focusing on the experience of borrowers in Georgia–borrowers like me.
This past spring, Georgia’s attorney general, Chris Carr, joined seven other state attorneys general in Missouri v. Biden, a federal lawsuit against The Biden-Harris Administration and the Department of Education to stop the SAVE Plan[1] In May, 16,340 Georgians with over $229 billion in debt were identified for student debt cancellation through the SAVE Plan. Despite the potential impact of this new policy, on June 24th, a judge in the case blocked any future student loan debt cancellations under the SAVE Plan.[2] On the same day, in Kansas v. Biden, a federal judge issued an injunction blocking all the remaining SAVE Plan provisions set to take effect in July.[3] These injunctions are temporary, and the federal courts have not decided on whether to strike down the SAVE repayment plan completely. However, they leave many Georgian student loan borrowers in financial distress that could have been eased through this program.
What is The SAVE Plan?
In 2007, Congress reauthorized the Higher Education Act. This action led to the creation of Income-Driven Repayment (IDR) plans, allowing borrowers of most federal student loans to pay only what they could afford each month based on a percentage of their income. Public servants and government and nonprofit workers can enroll in these plans to get cancellation through Public Service Loan Forgiveness (PSLF) in 10 years.[4]
Like many Georgians, I depended on programs like PSLF to help manage my student loan debt. This journey was hard. I served as a College Access Educator and enrolled in an IDR plan, but I still struggled to make ends meet. I picked up a second job for several years and three jobs at one instance to afford my monthly expenses. If reinstated, the SAVE Plan could have a positive impact on student loan borrowers in Georgia who have, like me, had to borrow and work hard to achieve higher education. The SAVE Plan:[5]
- Eliminates 100% of the monthly interest for subsidized and unsubsidized loans, once borrowers make a full scheduled payment.
- Reduces monthly payments by increasing the income exemption from 150% to 225% of the poverty line. The SAVE Plan would decrease monthly payments significantly more than any other IDR plan.
- Example: Under the SAVE Plan, a borrower in a family of two making $60,000 per year would pay $137 per month. Borrowers who make $60,000 with a family of four would pay $0 monthly for student loans.
- Decreases the repayment term/debt cancellation for borrowers who took out less than $12,000 in loans; the loan repayment period would be reduced to 10 years. This is especially important for students who attended community college and have lower loan principles; the repayment period is shorter, therefore, decreasing interest over time. For students who have a remaining balance after 10 years of repayment, the remaining balance is cancelled.
- Excludes spousal income from the total income used to determine monthly payments for people who are married and file taxes separately.
As a first-generation college student and education policy analyst with the Georgia Budget and Policy Institute, the student loan debt crisis is personal to me. When I graduated in 2008, I was uncertain whether I owed $10,000 or $100,000. The only thing I knew for certain was that I needed to borrow money for college. My hope was to eventually land a job that would provide the means to pay back my loans. This is a common experience for people of my generation, as it was drilled into us from our childhood that attending college was necessary. However, post-secondary guidance and financial support were not readily accessible, leaving many 18-year-olds like me in a vulnerable space to make such a major decision.
The economic downturn of 2007 worsened inflation and job prospects, so I returned to graduate school. I accumulated more student loans to acquire my master’s degree, still unaware of the implications of the high interest rates and the debt crisis that awaited me.
As the recipient of the Public Service Loan Forgiveness program (PSLF), I know the power of student loan cancellation and how it has improved my economic circumstances. More Georgians deserve support in overcoming their student loan debt, and the SAVE Plan is a step in the right direction.
Why the SAVE Plan is Critical for Georgians
In January, before the injunction to block SAVE Plan benefits, over 286,000 borrowers in Georgia enrolled in the program. Of these borrowers, 16,340 were already identified for debt cancellation. Despite this projected positive outcome, Georgia’s Attorney General, Chris Carr, expressed his discontent by teaming up with six other states to file the Missouri v. Biden lawsuit to block the SAVE Plan.
In Georgia, this policy could benefit student loan borrowers by reducing financial burdens, improving homeownership rates and credit scores, and lowering delinquency rates on other debt.[6] Student loan borrowers in Georgia owe over $69 billion. Georgia ranks third in the nation for student loan debt per borrower[7], [8] and Black women carry the most student debt of any racial/ethnic group.[9] Support for student loan debt relief is crucial for Georgians, especially for women of color.
Source: GBPI Analysis of Education Data Initiative Data, May 2023 Average Federal Student Loan by State
The student loan debt crisis in Georgia is further exacerbated by the fact that Georgia is only one of two states that does not offer comprehensive need-based aid, and Georgia reduced funding for higher education over the first two decades of the 2000s.[10] Moreover, 41% of students in Georgia are eligible for the Pell Grant, demonstrating significant financial need.[11] Compounding disinvestments have helped perpetuate Georgian’s student loan debt crisis, and are a factor in preventing financially marginalized communities from achieving economic stability.[12]
Mitigating Student Loan Debt: Recommendations for Georgia Lawmakers
- Establish a comprehensive, state-sponsored, need-based aid program that provides renewable grants on a sliding scale for students demonstrating the greatest financial need.
- Utilize the education lottery to help high school students mitigate student loan debt.
- Increase the College Completion Grant annual budget and lower the eligibility threshold for students to receive grants as first-year students.
- Encourage the U.S. Department of Education to pause student loans, including interest charges, while offering credit toward debt cancellation under Public Service Loan Forgiveness and Income-Driven Repayment until the SAVE Plan litigation is final.
Conclusion
Navigating and mitigating the challenges of student loan debt in Georgia and across the nation is not just a policy debate—it’s a personal struggle that affects millions. The SAVE Plan represents a beacon of hope for many, offering significant relief through innovative measures such as eliminating monthly interest for diligent borrowers, reducing payments for low-income families, and shortening the path to debt cancellation for those with smaller loan amounts. Despite legal setbacks, the essence of what we’re fighting for remains clear: a fair chance for every student to pursue education without the crippling weight of debt.
As a first-generation college student who has walked the tightrope of financial uncertainty, the victory of crossing the graduation stage was almost overshadowed by the looming burden of debt. Initiatives like the SAVE Plan and the Public Service Loan Forgiveness program are not just a lifeline but a testament to the power of collective action and policy reform. For Georgians, the stakes couldn’t be higher. With student debt levels soaring, the economic and social impacts ripple through every aspect of our lives, from homeownership to mental health. The SAVE Plan is not just about easing financial burdens; it’s about restoring fairness, equity, and opportunity in our education system.
As we await the final decisions from the courts, let us not lose sight of the broader vision: a future where education empowers, not encumbers. The battle for student loan relief is both personal and political. It reflects our values as a society and our commitment to future generations.
In advocating for the SAVE Plan and similar initiatives, we’re not just seeking relief; we’re demanding justice. For the students of today and tomorrow, let’s continue to push for policies that acknowledge the true value of education—as a public good, essential for the well-being of our community and the strength of our democracy.
Endnotes
[1] See also, Fox, S., & Young, A. (2024, June 25). GBPI responds to US district court ruling blocking student loan relief. https://gbpi.org/gbpi-responds-to-us-district-court-rulings-blocking-student-loan-relief/ (Under the SAVE Plan alone, 16,340 were identified to have student debt cancellation available through the program; however, the SAVE Plan works in conjunction with other programs and a broader system of crucially needed student loan debt relief that the lawsuits could also weaken. For example, there is a question of judicial intent as to the breadth of the Missouri case injunction which could affect not just potential SAVE Plan beneficiaries but also other beneficiaries in other programs like those within Income-Driven Repayment (IDR) plans who may benefit from cancellation. Between both SAVE and IDR, approximately 65,000 borrowers have been identified to have their loans cancelled.)
[2] Stein-Ross, C. (2024, June 25). A recipe for chaos”: Missouri and Kansas judges temporarily halt borrowers’ access to lower student loan payments, debt relief. Student Borrower Protection Center. https://protectborrowers.org/a-recipe-for-chaos-missouri-and-kansas-judges-temporarily-halt-borrowers-access-to-lower-student-loan-payments-debt-relief/
[3] Ibid.
Herrera, B. (2024, April 30). The Biden Administration’s Latest Effort to SAVE Borrowers and the States that are Hell-Bent to Stop It. Student Borrower Protection Center. https://protectborrowers.org/blog-biden-admins-latest-effort-to-save-borrowers-and-states-that-are-hell-bent-to-stop-it/
[5] Federal Student Aid. (n.d.). https://studentaid.gov/announcements-events/save-plan
[6] National Association of Realtors. (2016, June 13). The impact of student loan debt. https://www.nar.realtor/research-and-statistics/research-reports/the-impact-of-student-loan-debt
[7] Hanson, M. (2023, May). Student loan debt by state [2023]: average + total debt. Education Data Initiative. https://educationdata.org/student-loan-debt-by-state
[8] Ibid.
[9] Jackson, V. Williams, B. (202, April). How Black women experience student debt. The Education Trust. https://edtrust.org/wp-content/uploads/2014/09/How-Black-Women-Experience-Student-Debt-April-2022.pdf
[10] Shearer, L. (2019, June 22). Athens Banner-Herald. “Georgia has cut higher ed money more than most states. https://www.onlineathens.com/story/news/education/campus/2019/06/22/georgia-has-cut-higher-ed-money-more-than-most-states/4852291007/; Lee, J. (2022, February 23). The need for need-based aid. Georgia Budget and Policy Institute. https://gbpi.org/the-need-for-need-based-aid/
[11] National Center for Education Statistics. (2022). Percent of Undergraduate Students Awarded Pell Grants. https://nces.ed.gov/ipeds/TrendGenerator/app/build-table/8/35?cid=6&cidv=1%7C2%7C4%7C5%7C6%7C8%7C9%7C10%7C11%7C12%7C13%7C15%7C16%7C17%7C18%7C19%7C20%7C21%7C22%7C23%7C24%7C25%7C26%7C27%7C28%7C29%7C30%7C31%7C32%7C33%7C34%7C35%7C36%7C37%7C38%7C39%7C40%7C41%7C42%7C44%7C45%7C46%7C47%7C48%7C49%7C50%7C51%7C53%7C54%7C55%7C56.
[12] See also, Young, A., & Khalfani, R. (2023, September 11). From barriers to bridges: Expanding access to higher education and workforce training in Georgia. Georgia Budget and Policy Institute. https://gbpi.org/from-barriers-to-bridges-expanding-access-to-higher-education-and-workforce-training-in-georgia/
