Student loans SAVE plan will officially end after federal deal is reached: how 7 million borrowers will be affected – MARCA
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En/lifestyle/us-news/personal-finance
A settlement supported by the Trump administration would dismantle the Biden era program
A major pillar of the current student loan repayment system may soon disappear, leaving borrowers with yet another round of changes to absorb.
The Trump administration said Tuesday that it has reached a settlement that would shut down the SAVE repayment plan, the income-based program introduced in 2023 with the goal of easing monthly bills and limiting interest growth for many low-income borrowers. The announcement added another twist to an already unsettled student loan environment.
According to the Department of Education, the settlement would halt new enrollment in the SAVE plan and block any pending applications. Borrowers already using the plan would be shifted into repayment options that meet existing legal standards.
Officials said that borrowers will get a limited period to select a new plan, though they have not defined how long that grace period will last. The Office of Federal Student Aid will handle the changeover and try to guide borrowers toward whatever option fits their situation.
Under Secretary of Education Nicholas Kent framed the agreement as overdue.
“For four years, the Biden Administration sought to unlawfully shift student loan debt onto American taxpayers, many of whom either never took out a loan to finance their postsecondary education or never even went to college themselves, simply for a political win to prop up a failing Administration,” he said. “The Trump Administration is righting this wrong and bringing an end to this deceptive scheme.”
The response from borrower advocates was blunt. Many said the deal could leave millions facing higher monthly payments with little time to prepare.
The SAVE plan had offered some of the most generous terms available: sharply reduced monthly bills for eligible borrowers, interest protections that prevented balances from ballooning, and earlier forgiveness windows for those with the lowest incomes.
“Ripping the SAVE plan away from student loan borrowers now without access to a clear and affordable alternative is reckless and short-sighted, creating even more needless confusion, uncertainty, and financial stress for millions of Americans already struggling with the rising cost of living,” said Abby Shafroth of the National Consumer Law Center.
The settlement grew out of a lawsuit filed by Missouri, part of a coalition of GOP led states that went to court in 2024. They argued that the program sidestepped Congress by rewriting repayment policy through executive authority.
Federal judges in Kansas and Missouri sided with the states on key provisions, which led the Education Department to place SAVE borrowers in a temporary no interest forbearance while it sorted through the ruling.
© Unidad Editorial Información Deportiva, S.L.U. All rights reserved.
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This article was autogenerated from a news feed from CDO TIMES selected high quality news and research sources. There was no editorial review conducted beyond that by CDO TIMES staff. Need help with any of the topics in our articles? Schedule your free CDO TIMES Tech Navigator call today to stay ahead of the curve and gain insider advantages to propel your business!
En/lifestyle/us-news/personal-finance
A settlement supported by the Trump administration would dismantle the Biden era program
A major pillar of the current student loan repayment system may soon disappear, leaving borrowers with yet another round of changes to absorb.
The Trump administration said Tuesday that it has reached a settlement that would shut down the SAVE repayment plan, the income-based program introduced in 2023 with the goal of easing monthly bills and limiting interest growth for many low-income borrowers. The announcement added another twist to an already unsettled student loan environment.
According to the Department of Education, the settlement would halt new enrollment in the SAVE plan and block any pending applications. Borrowers already using the plan would be shifted into repayment options that meet existing legal standards.
Officials said that borrowers will get a limited period to select a new plan, though they have not defined how long that grace period will last. The Office of Federal Student Aid will handle the changeover and try to guide borrowers toward whatever option fits their situation.
Under Secretary of Education Nicholas Kent framed the agreement as overdue.
“For four years, the Biden Administration sought to unlawfully shift student loan debt onto American taxpayers, many of whom either never took out a loan to finance their postsecondary education or never even went to college themselves, simply for a political win to prop up a failing Administration,” he said. “The Trump Administration is righting this wrong and bringing an end to this deceptive scheme.”
The response from borrower advocates was blunt. Many said the deal could leave millions facing higher monthly payments with little time to prepare.
The SAVE plan had offered some of the most generous terms available: sharply reduced monthly bills for eligible borrowers, interest protections that prevented balances from ballooning, and earlier forgiveness windows for those with the lowest incomes.
“Ripping the SAVE plan away from student loan borrowers now without access to a clear and affordable alternative is reckless and short-sighted, creating even more needless confusion, uncertainty, and financial stress for millions of Americans already struggling with the rising cost of living,” said Abby Shafroth of the National Consumer Law Center.
The settlement grew out of a lawsuit filed by Missouri, part of a coalition of GOP led states that went to court in 2024. They argued that the program sidestepped Congress by rewriting repayment policy through executive authority.
Federal judges in Kansas and Missouri sided with the states on key provisions, which led the Education Department to place SAVE borrowers in a temporary no interest forbearance while it sorted through the ruling.
© Unidad Editorial Información Deportiva, S.L.U. All rights reserved.
Follow us
source
This article was autogenerated from a news feed from CDO TIMES selected high quality news and research sources. There was no editorial review conducted beyond that by CDO TIMES staff. Need help with any of the topics in our articles? Schedule your free CDO TIMES Tech Navigator call today to stay ahead of the curve and gain insider advantages to propel your business!
