More than 7 million student loan borrowers just got hit with a financial curveball as the Trump administration pulls the plug on the Biden-era Saving on Valuable Education (SAVE) plan, ABC reported.
This week’s announcement to terminate the SAVE plan, once hailed as the most generous income-driven repayment option, marks a significant rollback of progressive student debt relief efforts, leaving borrowers scrambling for new repayment strategies.
The SAVE plan, a hallmark of the previous administration, offered some borrowers payments as low as $0 a month and forgiveness in just 10 years—a deal many considered too good to be true.
Enter a coalition of red states, who challenged the plan as an unfair burden on taxpayers, arguing it shifted debt onto those who never borrowed a dime for college.
The Education Department, aligning with this perspective, announced on Tuesday a wind-down of the SAVE plan, pending court approval of the agreement with the states.
No firm date has been set for the complete shutdown, but the writing is on the wall—borrowers need to act fast.
With over 7 million affected, the department is urging borrowers to use its loan simulator tool to find alternative repayment options now, as most will likely face higher payments under other plans.
Interest charges have already resumed for SAVE participants, though full repayments remain in a frustrating limbo after over a year of forbearance due to the legal battle.
Advocates suggest paying what’s affordable until a clearer deadline emerges, but the uncertainty is enough to make anyone’s head spin.
Beyond current borrowers, this legal settlement could handcuff future administrations’ ability to offer student debt relief, with stipulations like notifying Missouri 30 days before canceling over $10 billion in loans for the next decade.
“It seems like, through this decision, they’re trying to pigeonhole or harm future administrations’ ability to cancel—that very deeply concerns me,” said Natalia Abrams, president and founder of Student Debt Crisis Center.
Well, Natalia, concern is warranted, but let’s be real: unchecked debt cancellation often smells like a political stunt rather than a sustainable fix, and taxpayers deserve a say before footing another massive bill.
Adding salt to the wound, Republicans passed a bill earlier this year, slashing repayment options, limiting choices to just two by 2028: a standard plan of 10 to 25 years, and a 30-year Repayment Assistance Plan with relief only at the end.
Meanwhile, the Trump administration’s final rule tweaks eligibility for the Public Service Loan Forgiveness program, and plans are afoot to shift the entire student loan portfolio away from the Education Department to either the Treasury or Small Business Administration—a move signaling a broader rethink of federal overreach in education financing.
“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 or never even went to college themselves, simply for a political win,” said Under Secretary of Education Nicholas Kent. And while empathy for struggling borrowers is real, Kent’s point hits hard—why should non-borrowers bear the cost of someone else’s degree in underwater basket weaving?
