Missouri, U.S. Department of Education Move to End SAVE Program: What Borrowers Must Know Now
The U.S. Department of Education has announced a major breakthrough after reaching a proposed settlement with the State of Missouri that would officially end the Biden-era SAVE program. This new move aims to bring clarity to millions of borrowers who were stuck in repayment limbo for more than a year. The agreement shifts every SAVE enrollee into a legal student loan repayment plan, closing the chapter on what federal officials now describe as an unlawful and costly policy.
End of the SAVE Program After Multiple Court Battles
The SAVE program was promoted as a new way to reduce monthly payments—sometimes to as low as $0—and provide faster forgiveness. However, courts repeatedly ruled that the administration did not have congressional authority to implement these debt-relief measures. According to federal estimates, the SAVE policy would have cost taxpayers more than $342 billion over ten years.
With the new settlement, the Department of Education will stop processing all pending applications, block new enrollments, and move every borrower into a legal student loan repayment plan recognized under federal law.
Officials Say Settlement Protects Taxpayers and Restores the Rule of Law
Under Secretary of Education Nicholas Kent stated that the settlement ends an “unlawful attempt to shift student loan debt onto taxpayers.” He emphasized that repayment obligations must follow the law, and the new approach ensures that Americans who never attended college—or already paid their loans—are not forced to cover someone else’s debt.
Missouri Attorney General Catherine Hanaway echoed similar points, saying that SAVE was an “unlawful scheme” that ignored congressional authority. The state’s lawsuit, joined by several others, played a key role in blocking SAVE and pushing for a transition back to legal student loan repayment plans that comply with federal statutes.
What Happens Next for SAVE Borrowers? Act Fast
If the court approves the settlement, more than 7 million borrowers currently enrolled in SAVE and another 450,000 who attempted to apply must select a legal student loan repayment plan within a limited time window.
The Department of Education will soon begin direct outreach with instructions for switching to a compliant repayment option. Borrowers will also be able to use the Loan Simulator tool on StudentAid.gov to compare monthly payment amounts and choose the best student loan repayment plan based on income, family size, and financial goals.
To ensure fast processing, the Department encourages borrowers to authorize access to their IRS tax information, which makes annual recertification automatic and simplifies the steps for switching to a new student loan repayment plan.
Why the Transition Matters
Since July 2024, borrowers enrolled in SAVE were placed into 0% interest forbearance due to ongoing litigation. Millions have been unable to make progress on their loans because the program was frozen. In August 2025, interest resumed, creating urgency for a permanent fix.
The settlement aims to finally resolve more than a year of uncertainty and guide borrowers into a stable, lawful student loan repayment plan that helps them stay on track financially.
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Background: How the SAVE Program Unraveled
- 2023: Biden Administration finalized SAVE regulations.
- 2024: Missouri and several states sued, arguing the plan was illegal.
- 2024–2025: Courts blocked major parts of the plan, forcing borrowers into forbearance.
- Feb 2025: Eighth Circuit blocked the entire plan, ending 0% interest.
- Dec 2025: Missouri and the U.S. Department of Education reached a settlement to permanently shut down the SAVE program.
The Department has also committed to removing SAVE regulations and focusing on implementing the new Repayment Assistance Plan (RAP) created under the One Big Beautiful Bill Act, expected to launch in 2026.
What Borrowers Should Do Now
Borrowers currently on SAVE must:
- Stay alert for official communication from Federal Student Aid.
- Use the Loan Simulator to compare options.
- Select a legal student loan repayment plan as soon as the transition window opens.
- Provide IRS access for faster processing and automatic yearly updates.
Final Takeaway
This settlement marks the official end of the SAVE program and the beginning of a systemwide shift toward lawful, stable federal repayment options. Every borrower affected must quickly choose a legal student loan repayment plan to avoid future delays, interest buildup, or repayment confusion.
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