Pending Legal Settlement Would End Biden-Era SAVE Plan
By Allie Arcese, Sr. Director of Strategic Communications & Engagement
The Trump administration announced on Tuesday that it has reached a legal settlement with the state of Missouri that, once approved by the courts, would end the Biden administration’s embattled Saving on a Valuable Education (SAVE) student loan repayment plan, which has been entangled in legal challenges since it was first unveiled in July 2023.
The settlement would end a years-long state of limbo for millions of federal student loan borrowers, many of whom have been unable to transition into another type of repayment plan while the legal battles played out. While borrowers enrolled in the SAVE plan were initially placed into an administrative forbearance without interest accrual or payments required, their loans began accruing interest again on August 1, 2025.
The state of Missouri will drop its lawsuit against the administration in exchange for the Department of Education (ED) agreeing not to enroll any new borrowers into the SAVE plan and moving those currently in the SAVE plan into a different repayment plan. ED would also hold a negotiated rulemaking session to remove the SAVE plan from federal regulations officially.
Once the settlement is approved, ED faces the monumental task of transitioning more than 7.6 million borrowers into new repayment plans, while it faces an already existing backlog of more than 1 million income-driven repayment applications. ED said in its announcement that borrowers will have “a limited time” to select a new repayment plan and that the Office of Federal Student Aid (FSA) will begin direct outreach to impacted borrowers “in the coming weeks.”
The Trump administration, as well as many red states and Republican lawmakers, have long viewed the SAVE plan as illegal and an unfair burden to taxpayers who either did not attend college or have already repaid their student loans.
“For four years, the Biden Administration sought to unlawfully shift student loan debt onto American taxpayers, many of whom either never took out a loan to finance their postsecondary education or never even went to college themselves, simply for a political win to prop up a failing Administration,” said Under Secretary of Education Nicholas Kent, in a statement. “The Trump Administration is righting this wrong and bringing an end to this deceptive scheme. The law is clear: if you take out a loan, you must pay it back.”
ED is encouraging borrowers currently enrolled in the SAVE plan to use its Loan Simulator to find a new repayment plan. NASFAA’s Student Loan Repayment Toolkit provides borrowers with tips on how to select a repayment plan and successfully navigate repayment.
Publication Date: 12/10/2025
Leah M | 12/10/2025 1:2:35 PM
But the Trump administration will use taxpayer dollars to bailout farmers, when most Americans never signed up for the risk of that profession.
Jeff T | 12/10/2025 9:56:04 AM
For additional coverage of ED's proposal, check out this article: https://ticas.org/affordability-2/dept-of-ed-announces-end-of-save-plan-offers-little-clarity-for-borrowers/.
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