Education Department announces deal to end BIDEN's SAVE student loan plan

Thursday, December 11, 2025 -The U.S. Department of Education has announced a proposed settlement agreement that would bring an end to the Biden-era “Saving on a Valuable Education” (SAVE) student loan repayment plan, pending approval by a federal court. 

The settlement, reached with the state of Missouri and joined by several other Republican-led states, will stop new enrollments in the SAVE plan, deny all pending applications, and require the roughly 7 million borrowers currently enrolled to transition into alternative repayment programs. 

Under Secretary of Education Nicholas Kent said the move ensures student loans are repaid under “legally compliant” plans and protects taxpayers from what his office described as an overreach of executive authority.

The SAVE plan, introduced under President Joe Biden in 2023, had offered many borrowers income-based monthly payments and a path to faster long-term loan forgiveness, with some eligible for monthly bills as low as $0. 

The legal challenges argued that the program exceeded the administration’s authority and shifted student loan costs unfairly onto taxpayers. As a result, courts have blocked elements of the plan, leaving borrowers in administrative limbo with paused payments and resumed interest accrual over the past year. 

The proposed settlement accelerates the end of SAVE well ahead of earlier deadlines set by Congress, and borrowers will soon face decisions about new repayment plans.

For millions of student loan holders, the end of SAVE marks a major shift in federal policy with potentially higher monthly payments and uncertainty about long-term debt relief. The Education Department is advising borrowers to use online tools to evaluate other options, including fixed payment or alternative income-driven plans, and has indicated a limited timeframe for selecting new arrangements. 

The settlement’s implementation timeline and precise requirements remain contingent on court approval, but the announcement has already sparked concern among borrower advocacy groups about financial strain and repayment stability ahead.