The Department of Education will end the Saving on a Valuable Education program under a proposed settlement with the state of Missouri.
Five notes:
1. SAVE is an income-driven repayment plan introduced in 2023 to cap monthly federal student loan payments at a portion of borrowers’ income. It also forgives remaining debt after a set number of payments.
2. A coalition of Republican attorneys general filed a lawsuit in April 2024 challenging the Biden administration’s authority to implement provisions of the plan.
3. The Education Department said Dec. 9 that as part of the settlement agreement, it will cease enrollment into the program, deny pending applications, and move all current SAVE borrowers into legal repayment plans.
4. If the agreement is approved by the court, more than 7 million current SAVE borrowers will have a limited time to select an alternative repayment plan, according to a news release.
5. The Education Department said additional details and guidelines on next steps will be announced in the coming months if the joint settlement is approved.
