Millions of borrowers in Biden's SAVE plan would start paying under new settlement
A settlement will end the SAVE student loan repayment plan, requiring millions of borrowers to switch to other repayment options.Summary
The U.S. Department of Education has reached a proposed settlement to end the SAVE (Saving on a Valuable Education) plan, a generous income-driven student loan repayment program. Republican state attorneys general, led by Missouri, sued the Biden administration, arguing the plan was too lenient. This legal challenge paused payments for SAVE borrowers, despite interest accruing since August. The settlement, if approved, will halt new enrollments in SAVE, deny pending applications, and transition the approximately 7 million current enrollees to other repayment plans, including options created by the Republican-backed One Big Beautiful Bill Act (OBBBA) rolling out in July 2026. Experts predict a challenging transition period for both borrowers and loan servicing companies, as many borrowers haven't been in repayment for years and face potential default. Critics argue the settlement will make repayment more expensive for borrowers, while supporters claim it prevents illegal overreach of federal student loan policies.
(Source：Wesa)