The SAVE Plan is officially coming to an end right now for over 7 million borrowers across the country. On December 9, the Trump Administration announced a proposed settlement with Missouri that’s going to force borrowers out of the payment pause and back into student loan repayment. The U.S. Department of Education actually reached an agreement that dismisses the ongoing litigation in exchange for shutting down the Saving on a Valuable Education plan completely. And borrowers who are currently enrolled in the SAVE Plan forbearance will need to pick a new Federal student loans repayment option pretty soon.
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How The SAVE Plan Shift Reshapes Student Loan Repayment And Relief
Trump Administration Officials Defend Settlement Decision
The proposed settlement actually requires the Education Department to stop enrolling any new borrowers in the program, and it moves all current SAVE Plan participants into what they’re calling legal repayment plans. The 8th U.S. Circuit Court of Appeals blocked the entire SAVE Plan back in February 2025, when it sided with Republican-led states that challenged Biden’s authority to create this kind of program.
Under Secretary of Education Nicholas Kent had this to say:
“For four years, the Biden Administration sought to unlawfully shift student loan debt onto American taxpayers, many of whom either never took out a loan to finance their postsecondary education or never even went to college themselves, simply for a political win to prop up a failing Administration. The Trump Administration is righting this wrong and bringing an end to this deceptive scheme.”
Missouri Attorney General Catherine Hanaway stated:
“Our Office fought for hardworking Americans who were being preyed upon by Biden Administration bureaucrats, and we won in court every time. Unilaterally saddling taxpayers with someone else’s Ivy League debt ignored Congressional authority and was clearly unlawful. We appreciate President Trump’s real, long-term solutions instead of illegal student loan schemes.”
What Happens Next For Federal Student Loan Borrowers
The Trump Administration actually resumed charging interest on SAVE Plan loans back in August 2025, which affected nearly 8 million borrowers at the time. And while the SAVE Plan pause allowed borrowers to delay their monthly payments for a while, many of them saw their balances grow as interest restarted each month. The Education Department will begin direct outreach to impacted borrowers in the coming weeks with some guidance on selecting new student loan repayment options.
Consumer advocates have been critical of the settlement. Persis Yu, who serves as deputy executive director and also managing counsel at Protect Borrowers, stated:
“This settlement is pure capitulation—it goes much further than the suit or the 8th Circuit order requires. Strip borrowers of the most affordable repayment plan.”
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The settlement really marks the definitive end of Biden’s student loan relief initiative. More than 42 million Americans hold Federal student loans right now, with outstanding debt that exceeds $1.6 trillion according to the Congressional Research Service. Borrowers who are enrolled in the SAVE Plan will have a limited time to transition to new plans. This agreement between the Trump Administration and Missouri, along with the other Republican-led states that challenged the program, will end the SAVE Plan pause that provided temporary relief for millions.