End of Biden's Signature Student Loan Repayment Plan: What Borrowers Need to Know
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 to terminate the Saving on a Valuable Education (SAVE) plan, an income-driven repayment plan based on a borrower's income and family size. As part of the deal, the agency will not enroll new borrowers in the SAVE plan and will deny all pending applications. Current SAVE borrowers will have a limited time to enroll in a new plan and begin repayments.
Higher education expert Mark Kantrowitz mentioned that borrowers may need to leave SAVE forbearance early next year, a quicker timeline than what was outlined in The One Big Beautiful Bill Act. 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 Biden administration introduced the SAVE program in 2023, touting it as the most affordable student loan repayment plan ever. The plan allowed over 4.6 million enrollees to lower their monthly bills to $0 per month. Tuesday's announcement marks the latest development in a legal battle over the program's fate, leaving millions of SAVE borrowers in limbo.
The SAVE plan faced opposition from attorneys general in Republican-led states, including Missouri, which sued in 2024, arguing that the plan exceeded the Biden administration's authority. In February 2025, a circuit court deemed the SAVE plan unlawful. During the legal battle, SAVE borrowers were placed in forbearance in July 2024, halting interest accrual. However, in July 2025, the Education Department announced that interest would resume on the loans, potentially costing enrollees $300 per month due to new interest charges.
The agreement reached on Tuesday will strip borrowers of the most affordable repayment plan, according to Protect Borrowers. The Education Department advises SAVE borrowers to use the Federal Student Aid Loan Simulator tool to explore other repayment options.