Trump Administration Moves to End Major Student Loan Forgiveness Plan: ‘We Won’t Tolerate It’
The Department of Education, under the Trump administration’s legacy policies, is taking steps to terminate one of President Joe Biden’s key student loan forgiveness initiatives, the Saving on a Valuable Education (SAVE) plan. This move follows a proposed joint settlement with Missouri and impacts over 7 million borrowers enrolled in the program.
The SAVE plan was introduced as a highly affordable income-driven repayment (IDR) option, offering $0 monthly payments for borrowers earning $16 an hour or less, and capping interest accrual for those making payments on time. It was launched after the Supreme Court blocked Biden’s earlier debt relief program. The plan aimed to ease repayment burdens as the federal pandemic loan pause ended.
However, several Republican-led states, including Missouri, challenged the plan in court, resulting in a federal appeals court blocking it earlier this year. The planned settlement ends ongoing lawsuits and signals a rollback of Biden-era debt cancellation policies.
Education Secretary Linda McMahon, a strong opponent of student loan forgiveness, stated the decision protects taxpayers from bearing the cost of what she describes as an "illegal and irresponsible" program. McMahon highlighted that the SAVE plan would have cost taxpayers more than $342 billion over ten years, many of whom never attended college or have already repaid loans.
Under Secretary of Education Nicholas Kent emphasized that borrowers are legally obligated to repay their loans, and federal overreach will no longer be tolerated. The Federal Student Aid Office will assist current SAVE borrowers in transitioning to alternative, lawful repayment plans using a Loan Simulator tool to find suitable options.
Critics warn this move will increase monthly payments for millions and halt their progress toward forgiveness. Advocates like Michele Zampini of The Institute for College Access & Success argue such dismantling of SAVE could cause chaos and hardship for borrowers. Persis Yu of Protect Borrowers called the settlement capitulation to right-wing efforts aimed at raising costs on student debt holders.
Adding to the shift, the forthcoming One Big Beautiful Bill Act—a signature policy of former President Trump—includes provisions to end all existing repayment plans, including SAVE, for new loans after July 1. It will replace them with two options: a standard repayment plan and the new Repayment Assistance Plan (RAP) beginning that date.
Borrowers currently in SAVE are urged to explore new plans soon to avoid payment disruptions. The department has committed to providing tools and support to ease this transition while upholding taxpayer protections.