Do Borrowers Still Have to Make Student Loan Payments Under SAVE?

President Biden's new student loan repayment plan, called SAVE, remains in limbo following a Supreme Court ruling that keeps the program on hold. This means that around eight million borrowers will not have to make payments while the legal challenges against the program are resolved. The program is designed to make payments more affordable by tying them to income and household size, potentially reducing many borrowers' payments by up to half. However, legal action from Republican-led states has created uncertainty about the plan's future, leaving borrowers with financial uncertainty about their loan repayments.

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The continued freeze on student loan repayments can have mixed impacts on consumer spending and broader economic sentiment. Borrowers may have more disposable income without payments, but uncertainty regarding the future of the program could also create hesitancy in their spending. If the legal challenges are resolved favorably, it may stimulate spending, positively affecting retail and consumer services stocks.

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