The Supreme Court’s decision to hear a challenge to federal income-driven student loan repayment plans has left approximately 800,000 New York City borrowers facing uncertainty as they await a ruling that could fundamentally reshape how Americans manage education debt.

The case, Kansas v. Department of Education, challenges the Biden administration’s SAVE plan, which calculates monthly payments based on borrowers’ income and forgives remaining balances after 10 to 20 years of payments. Oral arguments are scheduled for January, with a decision expected by June.

“This is the biggest student loan case since the debt forgiveness ruling two years ago,” said Betsy Mayotte, president of The Institute of Student Loan Advisors. “Millions of borrowers are holding their breath.”

New York City has among the highest concentrations of student loan borrowers in the country, reflecting both its large population of college graduates and the high cost of local universities. Approximately 1.2 million city residents carry student debt, with the average balance exceeding $35,000.

The SAVE plan, launched in 2024, significantly lowered monthly payments for many borrowers. A single person earning $50,000 with $30,000 in undergraduate debt would pay approximately $120 per month under SAVE, compared to $320 under standard repayment plans.

If the Court strikes down SAVE, those borrowers would face immediate payment increases while also losing the forgiveness provisions that made their debt manageable.

“I finally felt like I could see a path forward,” said Jennifer Martinez, 34, a public school teacher in Brooklyn who enrolled in SAVE earlier this year. “Now I am back to not knowing if I will be paying this debt until I die.”

Martinez owes $67,000 from a master’s degree in education. Under SAVE, her monthly payment is $180 and her balance will be forgiven after 10 years of payments as a public servant. Under standard plans, she would pay $700 monthly with no forgiveness.

The plaintiffs in the case, a group of Republican-led states, argue that the administration exceeded its legal authority by creating SAVE without explicit Congressional approval. They cite the same “major questions doctrine” the Court invoked when striking down broader debt forgiveness in 2023.

“The Constitution gives Congress, not the President, the power of the purse,” said Kansas Attorney General Kris Kobach. “These massive spending programs require democratic approval.”

The Department of Education has defended SAVE as a valid exercise of longstanding authority to manage federal student loan programs. Administration officials note that income-driven repayment has existed in various forms since the 1990s.

“We are confident in our legal position,” said Education Department spokesperson Maria Thompson. “SAVE is helping millions of Americans manage their debt while ensuring they can contribute to the economy.”

For borrowers, the uncertainty has complicated financial planning. Many have structured budgets around SAVE payments, and a sudden increase could force difficult choices between debt service and other necessities.

Financial advisors are counseling clients to prepare for multiple scenarios.

“Save what you can while payments are low,” advised Marcus Chen, a financial planner in Manhattan. “If SAVE survives, you will be ahead of schedule. If it does not, you will have a cushion.”

Local advocacy groups have organized informational sessions to help borrowers understand their options. The City University of New York, which serves many first-generation college students who rely heavily on loans, has expanded its financial counseling services.

“Our students borrowed in good faith, expecting certain terms,” said CUNY Chancellor Felix Matos Rodriguez. “Whatever the Court decides, we will help them navigate the consequences.”

The case has also become an issue in state and local politics. Governor Hochul has directed state agencies to explore options for assisting borrowers if SAVE is struck down, including potential tax credits and emergency assistance programs.

“New York will not abandon its students,” Hochul said in a statement. “We are preparing for all possibilities.”

The Court’s decision will likely turn on technical questions of administrative law rather than policy merits. Justices will examine whether Congress implicitly authorized income-driven repayment programs and whether SAVE represents a permissible evolution of that authority.

Legal observers note that the current Court has been skeptical of broad agency discretion, particularly when it involves significant spending. The 2023 debt forgiveness ruling rejected a $400 billion program, and SAVE’s estimated 10-year cost of $150 billion makes it a substantial target.

For Martinez and other borrowers, the legal nuances matter less than the practical impacts.

“I do not care about administrative law,” she said. “I care about whether I can afford my apartment and still save for retirement. That is what is at stake.”

The Court will hear oral arguments on January 15, with a decision expected before the term ends in June.