The Department of Education announced a joint settlement with Missouri and other Republican-led states this week that would end a student loan forgiveness program. Former President Joe Biden launched the Saving on A Valuable Education (SAVE) plan in 2023.
SAVE is an income-driven repayment plan that gave around 400,000 Americans full loan forgiveness and has been called “illegal” by the Trump administration. In 2024, the federal court case paused parts of the plan, placing borrowers in a form of forbearance.
Borrowers in forbearance during this time did not have to make payments, and their loans stopped accruing interest.
“Without congressional authorization, the Biden Administration misled millions of borrowers into the illegal SAVE Plan with false promises of artificially low monthly payments – oftentimes as low as $0 – and a short timeline to student loan ‘forgiveness,’” read a Dec. 9 press release.
If approved, the settlement would force borrowers to resume making payments and switch to new repayment plans. New applications to SAVE would no longer be accepted.
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The University’s in-state tuition of $18,046 and out-of-state tuition of $38,398 means that many students take out federal student loans to fund their education. According to ED data, 30% of undergraduates at the University receive federal loans, and the median total debt after graduation is $19,500.
A clear timeline for the settlement’s approval has not yet been defined. In the meantime, borrowers can browse other repayment options and use the Loan Simulator.
“The Department, through its Office of Federal Student Aid (FSA), will provide support to borrowers currently enrolled in the illegal SAVE Plan in selecting a new, legal repayment plan,” according to the press release.
