Trump administration moves to end the SAVE plan for millions of student borrowers
(CBS NEWS) – Sources from CBS say 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 on Tuesday announced a proposed settlement with the state of Missouri that it said would terminate the Saving on a Valuable Education, or SAVE, plan, an income-driven repayment plan that tabulates loan repayments based on a borrower’s income and family size.
As part of the deal, which is pending court approval, the agency said it will not enroll any new borrowers in the SAVE plan and will deny all pending applications. All current SAVE borrowers will have a “limited time” to enroll in a new plan and begin repayments, according to the department’s notice.
Higher education expert Mark Kantrowitz told CNBC that borrowers may need to leave SAVE forbearance early next year. That’s a quicker timeline than what was laid out in The One Big Beautiful Bill Act, passed in July.
That law gave borrowers enrolled in SAVE and other soon-to-be-phased-out repayment programs until July 1, 2028, to move to a new plan.
Under Secretary of Education Nicholas Kent said in Tuesday’s announcement that the Biden Administration’s policies unfairly shifted student loan debt onto American taxpayers. The Education Department said the SAVE program would have cost taxpayers more than $342 billion over ten years.
The Education Department declined to comment, pointing CBS News to a Dec. 9 Wall Street Journal op-ed written by Kent and Missouri Attorney General Catherine Hanaway,
“The Trump administration isn’t blind to the mounting student debt burden or the skyrocketing costs of a college degree,” they wrote. “But we refuse to force hardworking Americans to bear the burden of loans that aren’t theirs.”
The Biden administration announced the SAVE program in 2023, calling it the “most affordable student loan repayment plan ever.” The plan allowed 4.6 million of the program’s more than 7 million enrollees to lower their monthly bills to $0 per month, according to Protect Borrowers, an advocacy group
Tuesday’s announcement is the latest development in a months-long legal battle over the program’s fate, which has left millions of SAVE borrowers in limbo.
The SAVE plan received pushback from attorneys general from several Republican-led states, including Missouri, which sued in 2024, arguing the plan overstepped the Biden administration’s authority. In February 2025, a circuit court ruled the SAVE plan was unlawful, according to the Education Department.
As the legal battle played out, SAVE borrowers were put in forbearance in July 2024, meaning that their loans were temporarily placed on hold and interest stopped accruing.
In July 2025, the Education Department said it would restart charging interest on the loans beginning Aug. 1, a move advocacy group Protect Borrowers said could cost enrollees $300 per month due to new interest charges.
Tuesday’s agreement will “strip borrowers of the most affordable repayment plan,” Protect Borrowers deputy executive director and managing counsel Persis Yu said in a statement.
The Education Department is advising SAVE borrowers to use the Federal Student Aid Loan Simulator tool to explore other repayment plans.
As Kent and Hanaway note in their Wall Street Journal opinion piece, the One Big Beautiful Bill Act creates a single new income-driven repayment plan called the Repayment Assistance Plan, which has a repayment window of up to 30 years. The plan will be available for new borrowers beginning on July 1, 2026, along with a separate standard repayment plan, according to the Education Department.
