Who Gets to Decide Student Loan Rules?
About 1 in 6 American adults has student loan debt; a recent court decision just reshaped how some borrowers repay it.
The Big Story
A federal court ruled that the government’s SAVE student-loan repayment plan went beyond what the law allows.
The program lowered monthly payments and sped up forgiveness for some borrowers, but judges said changes that big should be approved by Congress, not a federal agency.
The Two Spins
From the Left
Lower monthly payments can help borrowers keep up with their loans and avoid falling behind.
Adjusting repayment plans is one way to respond to rising college costs and growing student debt.
From the Right
Big changes to student loan payments should come from Congress.
When taxpayer-backed loans are involved, elected lawmakers should decide the rules.
What This Means for Us
For borrowers, the biggest impact right now is uncertainty.
Some people who signed up for the SAVE plan may eventually move into different repayment programs, which could change monthly payments.
The ruling also means Congress, the lawmakers elected by voters, will likely play a bigger role in deciding what student loan repayment rules look like next.
How They Make Money
As of today, the Department of Education manages about $1.7 trillion in federal student loans. That’s more debt than the total credit card balances of Americans.
Borrowers make monthly payments with interest, and that money flows back to the federal government over time.
Takeaway
The Department of Education quietly runs one of the largest lending systems in the country.
The Number That Stuck With Me
90%
About nine out of ten student loans in the U.S. are held by the federal government.