ByAdam S. Minsky,
Senior Contributor.
Student loan borrowers in a key repayment plan may be getting a major update in less than two weeks. And the news is probably not going to be good for their student loans.
Borrowers who had enrolled in the SAVE plan have been stuck in limbo for more than a year due to an ongoing legal challenge. SAVE is an income-driven repayment plan created under the Biden-Harris administration that launched in 2023, offering lower payments, a generous interest subsidy, and a faster pathway to eventual student loan forgiveness. But a group of Republican states challenged the program. And last year, a federal appeals court issued an injunction blocking the SAVE plan as the lawsuit continued.
Last month, the group of states and the Trump administration filed a joint status report indicating that they are in settlement discussions to resolve the SAVE plan litigation. And a potential resolution could be announced by next week. Given that the GOP-led states and the Trump administration are aligned in opposing the SAVE plan, any outcome is unlikely to be positive for borrowers and may force student loans enrolled in the program into other, more expensive repayment plans. Here’s the latest.
