Court Rejects Department of Education’s Request to Approve Proposed Settlement That Would End SAVE Plan and Dismisses Case
WASHINGTON – Today, a federal court refused to approve a proposed settlement between the U.S. Department of Education and the State of Missouri that would have ended the SAVE plan – the most affordable student loan repayment plan. Instead, the Court dismissed the lawsuit challenging the plan, finding that the Department was no longer actively defending the plan, so there was no longer a live case before the court.
By refusing to approve the settlement or to vacate the SAVE plan, the court made clear that if the Trump Administration wants to eliminate the most affordable plan to repay student loans, it will have to do so itself. Legally, to end the SAVE plan, the Department of Education would be required to go through a new rulemaking process to repeal existing regulations giving borrowers a right to repay using the plan.
“SAVE survives another day, and the Trump Administration should think twice before trying to take away the most affordable repayment plan while Americans are crying out for government action to bring down the cost of living,” said Abby Shafroth, managing director of advocacy at the National Consumer Law Center. “There are currently over 7 million people enrolled in the SAVE plan. Ending it now would dramatically spike student loan bills and would be a disaster for families already struggling to get by.”
The consequence of eliminating the SAVE plan for individual borrowers would be enormous. For example, an unmarried student loan borrower with annual income of $45,000 enrolled in the SAVE plan could see their monthly payments more than quadruple from $38 to $175. Payments could jump even higher for borrowers with older loans. The financial shock to borrowers would be abrupt and dramatic: borrowers in the SAVE plan have not been billed in one-and-a-half years as a result of legal challenges, and would face a sudden resumption of bills if abruptly forced out of SAVE and into another plan.
“This decision offers borrowers a ray of hope that the Department of Education won’t deliver a devastating blow to borrowers in the midst of the affordability crisis,” said Shafroth. “The court has given the Department a golden opportunity to do right by people struggling with the staggering cost of living and crippling student loan debt.”
Related Resources
- Press Release: Proposed Elimination of SAVE Plan Creates Uncertainty, Affordability Concerns for Student Loan Borrowers, Dec. 9, 2025
- Student Loan Borrower Assistance News: What’s Happening With the SAVE Plan?, Oct. 29, 2025
- SLBA News: Update on Lawsuits Challenging the SAVE Plan and Options for Borrowers, Jan. 7, 2025
- SLBA News: SAVE: A New Payment Plan That Will Reduce Monthly Payments, July 26, 2023
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