Federal Court Denies Missouri’s Request to Pause Dismissal of SAVE Lawsuit
By Maria Carrasco, NASFAA Staff Reporter
After a federal court judge last week dismissed the state of Missouri’s lawsuit and proposed settlement with the Department of Education (ED) over terminating the Saving on a Valuable Education (SAVE) plan, the court doubled down on its decision on Wednesday and denied Missouri’s subsequent request to temporarily halt this dismissal.
Last Friday, Judge John Ross of the U.S. District Court for the Eastern District of Missouri dismissed Missouri’s lawsuit and settlement with ED, arguing that there is “no longer a live case or controversy sufficient” and that, therefore, the court doesn’t have authority to enter a judgment. Under the proposed settlement, ED agreed not to enroll any new borrowers in SAVE, to deny pending applications, and to move all 7 million program borrowers into other repayment plans.
There are still many unanswered questions for borrowers after years of legal challenges to the SAVE plan. In its initial dismissal, the court neither revived the SAVE plan nor struck it down; it simply stepped aside. Because the administration and the states now agree the plan should end, and Congress has already enacted a phase-out through the One Big Beautiful Bill Act (OBBBA), the judge ruled there was no longer a legal dispute to resolve.
In response to this dismissal, Missouri, representing a group of GOP states, filed a new motion requesting to temporarily halt Ross’s dismissal order while they pursue an appeal.
Ross then dismissed the new motion as well, stating that “there is no such remaining adversity” between ED and Missouri. Continuing to litigate would also put the court in the “impermissible and undesirable position of adjudicating a hypothetical question posed in ‘a friendly, non-adversary, proceeding’ in which a ‘real, earnest and vital controversy’ has ceased to exist and which the parties have resolved out of court,” Ross wrote.
Furthermore, Ross argued that the court is not convinced that Missouri faces an irreparable injury if a stay is not issued. Missouri argued that “only this Court’s preliminary injunction prevented enforcement” of the SAVE plan, and without making this court injunction permanent, individuals could start applying for student loan relief once again.
Ross wrote that the court isn’t persuaded by this argument, noting a provision in the One Big Beautiful Bill Act (OBBBA) will terminate the SAVE plan on July 1, 2028. Ross added that ED could have begun phasing out SAVE as early as the enactment of OBBBA on July 4, 2025, and that doing so does not require a court decision, or could have conducted a negotiated rulemaking session “to more immediately repeal” the SAVE plan.
This second dismissal again leaves borrowers in limbo until ED decides its next steps. While the SAVE plan legally has to sunset by June 30, 2028, ED can still conduct negotiated rulemaking as soon as it can schedule it to eliminate the program before that date. ED has yet to release any information indicating its plan to phase out SAVE through negotiated rulemaking.
Stay tuned to Today’s News for more updates on the SAVE plan.
Publication Date: 3/6/2026
You must be logged in to comment on this page.