WASHINGTON – It's official: Former President Joe Biden's signature student loan repayment plan is over. And the clock is ticking for millions of borrowers to enroll in another program.
On Dec. 9, the federal Education Department announced a proposed legal agreement meant to kill the program known as the Saving on a Valuable Education, or SAVE, plan. The agency said it settled with several red states who sued to stop SAVE in March 2024.
If approved by the courts, the settlement will require that no new borrowers are enrolled in the SAVE program, which based monthly bills on borrowers' incomes and was hailed by the Biden administration as the most affordable student loan repayment option in history. The department will also deny any pending SAVE applications and move current borrowers into different repayment plans.
The settlement, a death knell for one of Biden's main education policy achievements, puts an end to the legal limbo in which more than 7 million SAVE borrowers have been stuck for more than a year and a half. Those borrowers have been in administrative forbearance, not requiring them to make payments, since June of last year. Interest on their debt restarted this August.
The agreement also represents what the Trump administration called the "final nail in the coffin" to Biden's efforts to deliver nearly $200 billion in student loan relief to over 5 million Americans with crushing debt. Through the SAVE program specifically, President Donald Trump's predecessor greenlit roughly $5.5 billion in student loan discharges to nearly half a million SAVE borrowers. SAVE also brought many borrowers' monthly payments down to $0.
