Court Revives Biden-Era Student Loan Repayment Plan

KEY TAKEAWAYS

• A federal judge dismissed a case blocking the Saving on a Valuable Education plan, allowing the Department of Education to resume the repayment plan for now.
• The Department of Education and the plaintiffs who sued to end SAVE still have the ability to continue the lawsuit.
• Congressional action is still expected to eliminate the SAVE plan by July 2028.

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The Saving on a Valuable Education repayment plan neared its end, but it’s not dead yet.

On Friday morning, the district judge in the State of Missouri v. Trump case said it refused to rule that the SAVE plan had to end. It also dismissed the case in its entirety, meaning all injunctions previously restricting the SAVE plan are moot.

That means the Department of Education can allow SAVE plan borrowers to make payments under the income-driven repayment plan. It also allows for qualifying borrowers to receive forgiveness under the SAVE plan.

However, the district judge did not decide whether the SAVE plan was legal. As of Monday, the Department of Education has not announced whether it will lift the administrative forbearance that has paused payments and forgiveness accruals for SAVE borrowers for over a year and a half.

This means borrowers in the SAVE plan are still in limbo, awaiting news from the Department of Education about what will happen to their repayment plan.

Why This Matters

Millions of borrowers on the SAVE plan have been in limbo for almost two years. This decision throws borrowers back into the chaos.

The Department of Education said it is currently “evaluating the Court’s decision” when asked to comment Friday afternoon.

The Missouri v. Trump lawsuit began in April 2024 when a group of states argued that the SAVE plan, an income-driven repayment plan created under the Biden Administration, was illegal. The repayment plan offered generous terms, such as lower monthly payments and a quicker path to forgiveness, which the states argued the president lacked the authority to implement.

The Biden administration fought back, and while the lawsuit went back and forth, the millions of borrowers in the SAVE plan were placed under an administrative forbearance.

SAVE plan borrowers, which now number more than 7.43 million, have been in this forbearance for over a year and a half, unsure of what will happen to their repayment plan.

These borrowers received some clarification after President Donald Trump’s “One Big, Beautiful Bill” was passed in July. The law ordered the SAVE plan to be phased out by July 2028. The court ruling does not affect this law, but it does allow borrowers to remain on the plan until it is phased out, an option that was not available before Friday’s ruling.

The Department of Education under Trump tried to hammer the final nail in SAVE’s coffin in December 2025, when it filed an agreement to immediately eliminate the repayment plan and move all enrolled borrowers to another option, as long as the district judge approved.

However, Sr. District Judge John Ross refused to approve the agreement to end SAVE.

“What the parties seek is a ruling on the merits as to the validity of [the SAVE plan] that no party intends to continue to defend, and which has effectively ended via congressional action. Such a ruling is not permitted,” Ross wrote in a case filing Friday.

The judge also dismissed the case “without prejudice,” meaning the Department of Education and the states that originally brought the lawsuit can refile and resume the case. It also means that all injunctions issued in the lawsuit that restricted borrowers from making payments or receiving forgiveness through SAVE are terminated.

The Education Department still has the opportunity to eliminate SAVE immediately, but would have to go through a negotiated rulemaking process in order to do so.

Update, Feb. 27, 2026: This article has been updated to include the Department of Education’s response.

Clarification, March 2, 2026: This article has been updated to include that borrowers in the SAVE plan remain in an administrative forbearance.

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