On December 9, 2025, the U.S. Department of Education announced that it had reached a proposed settlement with the state of Missouri to end the SAVE Plan.
What is SAVE — and why it’s ending
The SAVE Plan (short for “Saving on a Valuable Education”) was launched under the Biden administration as a new income-driven repayment program. It promised low or even zero monthly payments for many borrowers and a streamlined path to loan forgiveness.
But SAVE was challenged in court by several states (with Missouri leading the legal action), which argued that the plan exceeded the legal authority granted to the Education Department.
Beginning in mid-2024 and into 2025, courts issued injunctions blocking key provisions of SAVE. As a result, borrowers enrolled under SAVE were placed into administrative forbearance with a 0 % interest rate — but their progress toward forgiveness was frozen.
In response to those rulings, the Department resumed interest accrual on SAVE loans starting August 1, 2025, and notified borrowers that they needed to move to legally compliant repayment plans.
What the settlement says
Under the proposed settlement with Missouri:
- The Department will no longer enroll any new borrowers in SAVE.
- All pending SAVE applications will be denied.
- Current borrowers (over 7 million) will be moved into alternative, legally compliant repayment plans.
- The Department agreed to begin direct outreach to impacted borrowers to help them select a new plan and estimate their future payments.
- The settlement also calls for the Department to start a rule-making process to formally remove SAVE from federal regulations (with limited exceptions around deferment/forbearance provisions that may still count for certain programs).
- If the settlement is approved by the relevant court, it will mark the definitive end of SAVE.
What this means for borrowers
For the millions of people enrolled in SAVE, this settlement means they need to choose, or be placed into, another repayment plan. The Department is encouraging borrowers to use its Loan Simulator tool to estimate payments under available plans and to submit any necessary income-driven repayment (IDR) applications promptly.
Current Administration’s Position
In its announcement, the current administration emphasized that ending the SAVE Plan is part of its broader effort to reverse policies it views as exceeding the legal authority of the Department of Education. Officials stated that the settlement with Missouri reflects the administration’s commitment to enforcing existing law regarding student loan repayment and limiting federal actions they believe improperly shift costs to taxpayers.
“For four years, the Biden Administration sought to unlawfully shift student loan debt onto American taxpayers, many of whom either never took out a loan to finance their postsecondary education or never even went to college themselves, simply for a political win to prop up a failing Administration,” said Under Secretary of Education Nicholas Kent. “The Trump Administration is righting this wrong and bringing an end to this deceptive scheme. The law is clear: if you take out a loan, you must pay it back. Thanks to the State of Missouri and other states fighting against this egregious federal overreach, American taxpayers can now rest assured they will no longer be forced to serve as collateral for illegal and irresponsible student loan policies.”
“Our Office fought for hardworking Americans who were being preyed upon by Biden Administration bureaucrats, and we won in court every time,” said Missouri Attorney General Catherine Hanaway. “Unilaterally saddling taxpayers with someone else’s Ivy League debt ignored Congressional authority and was clearly unlawful. We appreciate President Trump’s real, long-term solutions instead of illegal student loan schemes.”
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