SAVE Plan’s Future Still Uncertain for Millions, Despite Another Court Decision in Its Favor

KEY TAKEAWAYS

• The Department of Education could resume payments and forgiveness under the Saving on a Valuable Education repayment plan, but that doesn’t mean it will.
• Borrowers under the SAVE plan have been in administrative forbearance for over a year and a half, delaying progress toward loan forgiveness.
• The SAVE plan is set to end in July 2028, but the Department of Education could end it earlier.

A district judge reaffirmed that the Department of Education could resume payments and forgiveness under the Saving on a Valuable Education repayment plan Wednesday afternoon, but it may not do much for borrowers.

In April 2024, a group of states sued then-President Joe Biden and his Department of Education, arguing that the administration lacked the authority to implement the SAVE plan. This group requested on Wednesday that the SAVE plan be paused once again while they appeal the district judge’s recent decision to dismiss the case and all injunctions that previously paused the repayment plan’s implementation.

The district judge denied this request on Wednesday afternoon. That means the Department of Education could lift the administrative forbearance SAVE borrowers have been under for over a year and a half—but that doesn’t mean it will.

Why This Matters

More than 7.4 million federal student loan borrowers are still on the SAVE repayment plan. It is essential that these borrowers know the status of their repayment plan to ensure they do not fall behind on payments and can take advantage of the benefits the SAVE plan offers.

When the lawsuit began, rulings and injunctions prevented the Department of Education from implementing the SAVE plan. Amidst the uncertainty and while the Biden administration defended the SAVE plan in court, it placed all enrolled borrowers in administrative forbearance.

The forbearance meant borrowers did not have to make payments. However, it also prevented SAVE borrowers from progressing toward loan forgiveness. Under all income-driven repayment plans, borrowers can get the remainder of their debt discharged after 20 or 25 years of payments. The SAVE plan lowered the number of payments required and made it easier for many borrowers to receive this time-based forgiveness.

The case trajectory shifted when the Trump administration took over. The Department of Education under President Donald Trump has generally been unsupportive of the Biden-era repayment plan. It also began charging interest on loans in forbearance in August 2025.

In December, the Department of Education reached an agreement with the states that would eliminate SAVE and move all enrolled borrowers into another repayment plan. Last week, however, a district judge refused to approve the agreement and dismissed the case. That included all previous injunctions that prevented the Department of Education from implementing the SAVE plan.

That meant the Department of Education could lift the forbearance and resume payments for SAVE borrowers. However, student loan policy experts generally say the Department of Education is unlikely to resume payments or proceed with granting forgiveness under SAVE.

What Does This Mean For SAVE Borrowers

In the end, the district judge’s decision to allow the SAVE plan to resume doesn’t mean much for borrowers.

The department has yet to announce its plans for the SAVE program and has not responded to questions about its next steps since the district judge’s decision.

Even if the states do not succeed in their appeal and the SAVE plan is allowed to continue, the repayment plan has a set end date of July 2028. At this time, the SAVE plan, along with two other income-driven repayment plans, will be sunset in accordance with the “One Big, Beautiful Bill,” and borrowers on these plans will need to find another option.

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The Department of Education could even eliminate the SAVE plan sooner through a negotiated rulemaking process. This process involves drafting the language of a new law through a committee before putting it out for public comment and typically takes several months to a year to complete.

“I personally do not view [the dismissal] as a celebration if you’re a person who was hoping that the SAVE plan would be reinstated,” said Megan Walter, a senior policy analyst at the National Association of Student Financial Aid Administrators, on Monday. “I do not think that is what’s going to happen.”

Important

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