"The Saving on a Valuable Education plan, better known as SAVE, was the most flexible and generous of all income-driven repayment plans, promising expedited loan forgiveness and monthly payments as low as $0 for low-income borrowers. Republican state attorneys general, led by Missouri, sued the Biden administration, arguing in court that SAVE was too generous. The legal challenges put all SAVE borrowers in limbo for months."
""The law is clear: if you take out a loan, you must pay it back," Under Secretary of Education Nicholas Kent said in a statement announcing the proposed agreement. "Thanks to the State of Missouri and other states fighting against this egregious federal overreach, American taxpayers can now rest assured they will no longer be forced to serve as collateral for illegal and irresponsible student loan policies.""
The SAVE plan offered expedited forgiveness and monthly payments as low as $0 for low-income borrowers, making it the most flexible income-driven repayment option. Republican state attorneys general, led by Missouri, sued arguing SAVE was overly generous, creating months of legal limbo during which borrowers were not required to make payments. Interest resumed accruing on SAVE loans in August following the pandemic pause. The proposed settlement would terminate SAVE, block new enrollments, deny pending applications, and transition roughly seven million enrolled borrowers into alternative repayment plans. Borrowers will have a limited time to choose between fixed-payment and income-based plans, with two new plans set to roll out in July 2026 under OBBBA.
Read at www.npr.org
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