The Department of Education under the Trump administration has reached a settlement that officially terminates the Biden-era Saving on a Valuable Education (SAVE) repayment plan, a move described as ending an "illegal" program that affected millions of federal student loan borrowers.
The SAVE Plan, introduced as an income-driven repayment option, promised lower monthly payments—sometimes as low as $0—and faster paths to forgiveness for many of the roughly 8 million enrolled borrowers. However, it faced repeated legal challenges and blocks from courts, which ruled it lacked proper congressional authorization.
According to the Education Department, the previous administration "misled millions of borrowers" with promises of artificially reduced payments and accelerated debt cancellation. The settlement resolves ongoing litigation and winds down the plan entirely.
Borrowers previously on SAVE will now transition to other existing repayment options, potentially facing higher monthly payments depending on their income and loan details. Officials emphasize that this restores accountability and prevents unauthorized forgiveness at taxpayer expense.
This development marks a significant shift in federal student loan policy as the new administration prioritizes legal boundaries over expansive relief programs.