Trump administration moves to end the SAVE plan for millions of student borrowers

The Trump administration has reached an agreement that could end President Biden’s signature student loan repayment plan, a move that may force millions of borrowers back into repayment. The Education Department announced a proposed settlement with the state of Missouri that would terminate the Saving on a Valuable Education, or SAVE, plan, an income-driven repayment plan that calculates loan repayments based on a borrower’s income and family size. This agreement, pending court approval, means that no new borrowers will be enrolled in the SAVE plan, and all pending applications will be denied. Current SAVE borrowers will have a limited time to enroll in a new plan and begin repayments.

According to higher education expert Mark Kantrowitz, borrowers may need to leave SAVE forbearance early next year, which is a quicker timeline than what was initially outlined in The One Big Beautiful Bill Act passed in July. The law originally gave borrowers until July 1, 2028, to transition to a new plan from SAVE and other soon-to-be-phased-out repayment programs.

Under Secretary of Education Nicholas Kent stated that the Biden Administration’s policies unfairly shifted student loan debt onto American taxpayers. The Education Department estimated that the SAVE program would have cost taxpayers over $342 billion over ten years. The Trump administration, as outlined in a Wall Street Journal op-ed by Kent and Missouri Attorney General Catherine Hanaway, refused to burden hardworking Americans with loans that weren’t theirs.

The SAVE program, introduced by the Biden administration in 2023, was hailed as the most affordable student loan repayment plan ever. It allowed over 4.6 million enrollees to lower their monthly bills to $0 per month. However, a legal battle ensued when several Republican-led states, including Missouri, sued in 2024, arguing that the plan exceeded the Biden administration’s authority. In February 2025, a circuit court ruled the SAVE plan unlawful, leading to the current agreement to terminate the program.

This latest development leaves millions of SAVE borrowers in limbo, with the Education Department advising them to use the Federal Student Aid Loan Simulator tool to explore other repayment options. The One Big Beautiful Bill Act establishes a new income-driven repayment plan called the Repayment Assistance Plan, with a repayment window of up to 30 years. New borrowers can access this plan starting July 1, 2026, along with a separate standard repayment plan.

In conclusion, the termination of the SAVE program marks a significant shift in student loan repayment policies, impacting millions of borrowers who will need to transition to new plans. Borrowers are urged to explore their options and make informed decisions about their repayment plans moving forward.