Trump Administration Reaches Settlement To End Biden-Era SAVE Student Loan Program; 7 Million Borrowers Affected

The Trump administration on Tuesday announced a proposed settlement with the State of Missouri to formally terminate the Biden-era "Saving on a Valuable Education" (SAVE) student loan repayment plan.

The U.S. Department of Education said it reached the joint settlement after litigation brought by Missouri and several other Republican-led states. The SAVE program has been paused since February, when the 8th U.S. Circuit Court of Appeals sided with the challengers.

Settlement Terms

Under the proposed agreement — which must be approved by a judge — the Education Department would stop enrolling new borrowers in SAVE, deny pending SAVE applications and transition current SAVE participants into other repayment plans administered by the department. The agency says more than 7 million people are enrolled in SAVE and that it will begin outreach to affected borrowers in the coming weeks with guidance on repayment options and next steps.

Reactions From Officials

Undersecretary of Education Nicholas Kent said the Biden administration had attempted "to unlawfully shift student loan debt onto American taxpayers," calling the settlement a correction of that approach. Missouri Attorney General Catherine Hanaway praised the move as a shift toward what she described as "real, long-term solutions."

The article notes that the Supreme Court in 2023 struck down President Biden’s broader student loan forgiveness effort, finding it was an unlawful exercise of presidential power.

What Borrowers Should Expect

Borrowers enrolled in SAVE should expect direct communications from the Department of Education explaining which repayment plan they will be moved into and what changes to monthly payments, timelines, or forgiveness eligibility may apply. Because the settlement requires judicial approval, the changes will not take effect until a judge signs off.

Key Fact: The Education Department reports that more than 7 million people are currently enrolled in the SAVE program.