Was SAVE Just Dealt Its Final Blow? What the Latest Court Decision Means for Student Loan Borrowers

It looks like the end of the line for SAVE after a US appeals court blocked the student loan debt relief program.

The Eighth Circuit Court of Appeals ruled Tuesday that former President Joe Biden’s administration exceeded its authority by designing the Saving for a Valuable Education plan to largely forgive loans rather than requiring borrowers to repay them.

While the plan was stuck in limbo, borrowers had been told their payments would likely remain on pause until December. This week’s ruling could change that.

“Now that the SAVE repayment plan is blocked by the appeals court, the interest-free forbearance will end, probably within a few months,” said student loan expert Mark Kantrowitz.

SAVE, which offered millions of borrowers lower monthly payments and a shorter timeline for loan forgiveness, was challenged by Republicans after its launch in 2023. President Donald Trump has made it clear he isn’t a fan of broad student loan forgiveness, and experts don’t expect him to defend the plan. 

If you’re worried about the fate of your student loans, here’s what you need to know.

Why was SAVE blocked?

The Biden administration launched SAVE with an executive order in August 2023. It lowered monthly student loan payments and offered multiple paths to forgiveness. 

Seven Republican-led states, opposed to broad student loan forgiveness, sued to block the plan, saying the Department of Education overstepped its authority by modifying the existing student loan repayment plan that had been approved by Congress. 

A federal court issued an injunction in 2024 that prevented the department from using the SAVE plan to forgive loans that had earned forgiveness under the SAVE, Pay As You Earn (PAYE) and income-contingent repayment (ICR) plans.

What happens to my student loans if I’m enrolled in SAVE?

It’s unclear if SAVE borrowers will automatically be enrolled in a standard repayment plan, but the federal student loan website says eligible borrowers may now enroll in PAYE and ICR Plans.

The timeline for rolling over loans is also unclear, although experts predict borrowers will likely have 90 days or less to move to another plan. 

“If you’re currently enrolled in SAVE, my advice is to stay informed and proactive,” said Ken Ruggiero, CEO of Ascent Funding, a private student loan lender. “While legal challenges unfold, your loan servicer should continue processing payments as usual.”   

Even though SAVE is gone, there are still options for borrowers seeking relief, according to Kantrowitz.

“[Income-base repayment plans] and PAYE continue to forgive the remaining debt after 25 and 20 years of payments because the forgiveness appears in the statutory language,” he said. However, not all SAVE borrowers will be eligible to enroll in other income-driven repayment plans.

It’s a smart idea to review alternative repayment options using the student loan simulator from StudentAid.gov. You’ll be able to compare different payment plans and get an idea of what your new monthly payment will look like.

If you’re in the Public Service Loan Forgiveness Program and close to meeting the 120 payments required for forgiveness, consider enrolling in the PSLF Buyback program. Eligible borrowers can make up payments that were skipped during forbearance.

More changes to student loans could be on the way as Trump has called for eliminating the Department of Education entirely. For now, keep an eye out for emails from the student aid office and your servicer, and check StudentAid.gov/saveaction for updates.