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The Trump administration said Tuesday it has reached a proposed settlement with Missouri to formally end the “Saving on a Valuable Education” repayment plan, a major federal student loan program created under President Joe Biden.
The Education Department announced that under the agreement — which still requires court approval — the agency would stop enrolling new borrowers in the plan, deny pending applications and transition all current SAVE participants into other repayment programs. The settlement stems from lawsuits filed by Missouri and several other Republican-led states that challenged the plan’s legality.
The SAVE program has been paused since February after the 8th U.S. Circuit Court of Appeals sided with the states and blocked the Biden administration from implementing key provisions. More than 7 million borrowers are currently enrolled.
The Education Department said it would begin contacting affected borrowers in the coming weeks with information about repayment options.
“For four years, the Biden administration sought to unlawfully shift student loan debt onto American taxpayers,” Undersecretary of Education Nicholas Kent said in a statement. “The Trump administration is righting this wrong… The law is clear: if you take out a loan, you must pay it back.”
Missouri Attorney General Catherine Hanaway said the agreement reflects “real, long-term solutions instead of illegal student loan schemes.”
Biden’s broader effort to cancel federal student loan debt, which would have eliminated up to $20,000 for tens of millions of borrowers, was struck down by the Supreme Court in 2023, with the majority ruling that the administration exceeded its authority.
The proposed settlement marks the most significant policy shift to date in the Trump administration’s overhaul of federal student loan programs and would unwind the centerpiece of Biden’s approach to income-driven repayment.
