‘We’re still struggling:’ Federal ruling could make student loan repayment more difficult

RICHMOND, Va. (WRIC) -- A recent federal court ruling may make it harder for some borrowers to pay off their student loans. The decision temporarily blocks applications for several income-based repayment plans, which adjust payments based on a borrower’s earnings.

The ruling specifically impacts the Saving on a Valuable Education (SAVE) plan, introduced by President Joe Biden, which aimed to reduce monthly payments from 10% to 5% of a borrower's income. Other affected plans include Income-Contingent Repayment (ICR) and Pay As You Earn (PAYE) — all designed to ease the financial burden of student loan debt.

Right now, there is an accumulated $2.1 trillion in student debt.

For borrowers like Jessica Edgerton, who graduated from graduate school in 2018 and still carries about $55,000 in student loan debt, the injunction creates uncertainty. Some of her loans are tied to the SAVE plan, and with applications now blocked, her financial aid office has deferred her loans while interest continues to accumulate.

"You do have people out here who are trying to do what they're supposed to," Edgerton said. "But when you put a massive halt like this, you put a massive halt on people and their lives."

The court’s decision argues that these repayment plans are too generous and exceed what Congress originally intended. If the court ultimately strikes them down, borrowers may be forced to switch to other plans — potentially resulting in higher monthly payments.

For now, the only options available are standard or graduated repayment plans, which do not take income into account. Borrowers like Edgerton say the real challenge is not just making payments, but the uncertainty of what comes next.

"They're seeing their parents, their family members or people they know are in the whole cycle of trying to pay or rebuild their life because it's a cycle," she said.

As the legal battle over these repayment plans continues, millions of borrowers are left wondering how they will navigate their student loan debt in the months ahead.