A federal judge on Friday rejected the Trump administration's bid to end the SAVE student loan repayment plan, delivering a significant victory for the roughly 7 million borrowers who depend on the program. The ruling shields the plan from immediate elimination, though its long-term future remains uncertain as Congress and the courts continue to battle over its fate.
The decision came as the Trump administration sought to scrap the Saving on a Valuable Education plan, which offers borrowers some of the lowest monthly payments available under federal student loan rules. The judge's dismissal of the administration's request means the plan will remain available to current borrowers, at least for now.
Key Takeaways
- A federal judge rejected the Trump administration's attempt to eliminate the SAVE student loan repayment plan
- The plan currently serves approximately 7 million borrowers who benefit from reduced monthly payments
- Existing legislation passed in July 2025 would phase out SAVE by July 2028, though the Department of Education has proposed ending it sooner
- The ruling provides temporary protection for borrowers, though long-term uncertainty remains
Background
The SAVE plan represents a major shift in how federal student loans work. It's an income-driven repayment option that calculates your monthly payment based on what you actually earn. For borrowers making $32,800 a year or less, the monthly payment is zero. For others, payments are set at just 5% of income above 225% of the poverty line for undergraduate loans, and a weighted average between 5% and 10% for those with graduate loans.
When the plan launched, it promised something unusual: the federal government would cover any interest that accrues if your monthly payment doesn't cover it. This means your loan balance won't grow due to unpaid interest as long as you're making your scheduled payment. For millions of borrowers, this represented a lifeline during years when they couldn't afford standard repayment amounts.
The Trump administration has taken aim at SAVE as part of a broader effort to reshape federal student loan policy. The administration argued that the plan was too generous and unsustainable. But the judge's ruling suggests there are legal hurdles to simply eliminating it without going through proper procedures.
"The judge's decision protects borrowers from sudden changes to their repayment obligations, at least temporarily."
Key Details
The Current Legal Situation
While Friday's ruling blocks the Trump administration's immediate move, the SAVE plan's future isn't entirely secure. Congress already passed the "One, Big, Beautiful Bill Act" in July 2025, which would phase out SAVE by July 2028. Additionally, the Department of Education has proposed a settlement agreement that would end the plan even sooner, though no clear deadline has been set for that proposal.
This creates a complex situation where the plan survives the current legal challenge but faces elimination through other mechanisms. Borrowers currently on SAVE need to understand that their current arrangement may not last indefinitely.
What Happens to Borrowers
For the 7 million people currently using SAVE, the judge's decision means they can continue making payments under the plan's favorable terms. Many of these borrowers have gone years without making payments during the federal payment pause that ended in 2023. Now they're facing the reality of resuming payments, and SAVE has been their most affordable option.
But here's the catch: if SAVE does get eliminated by 2028 as current law suggests, these borrowers will need to switch to a different repayment plan. Starting July 1, 2026, the federal government will introduce a new option called the Repayment Assistance Plan, or RAP. This plan offers income-driven payments ranging from 1% to 10% of adjusted gross income, with a minimum of $10 per month if your income falls below $10,000 annually.
Experts have raised concerns that RAP won't be as generous as SAVE. The new plan benefits higher-income borrowers more and removes some protections that SAVE borrowers currently enjoy. For lower-income borrowers, the shift could mean higher monthly payments or less favorable forgiveness terms.
What Borrowers Should Do Now
Financial advisors recommend that SAVE borrowers take several steps immediately. First, identify your loan servicer and understand exactly how much you owe. Second, start comparing repayment options using the Federal Student Aid loan simulator tool. This helps you see what your payments would look like under different plans.
Third, consider whether you want to make voluntary payments now while you're still on SAVE. Some borrowers are making interest-only payments to prevent their balances from growing while the payment pause continues. Others are making full payments to pay down their debt faster.
Fourth, adjust your budget to account for resuming payments. If you haven't made a student loan payment in years, reintroducing that expense to your monthly budget requires planning. Financial experts suggest setting aside money now so you have a buffer when payments restart.
Finally, if you're facing financial hardship, explore whether you qualify for deferment or forbearance. These options let you pause payments temporarily without defaulting on your loans.
What This Means
The judge's decision is a temporary win for borrowers, but it doesn't solve the underlying problem. The SAVE plan will likely disappear within the next two years, forcing millions of people to switch to less favorable repayment options. The Trump administration and Congress disagree fundamentally about student loan policy, and that conflict will probably continue in the courts.
For borrowers, this means uncertainty. You can rely on SAVE for now, but you should prepare for life after the plan ends. That means understanding your alternatives, calculating what your payments might look like under RAP or other plans, and adjusting your finances accordingly.
The broader question is whether the federal government should be subsidizing student loan payments at all. The Trump administration argues that SAVE is too expensive and unfair to people who didn't go to college. Supporters of the plan counter that it helps millions of borrowers who are struggling with debt and shouldn't be punished for pursuing education.
This debate will likely continue in Congress and the courts. For now, borrowers have breathing room. But they shouldn't assume that breathing room will last.
Frequently Asked Questions
What happens to my SAVE plan if it gets eliminated?
If SAVE is eliminated before you pay off your loans, your loan servicer will automatically enroll you in a different repayment plan. The most likely option is the new Repayment Assistance Plan starting July 2026. You can also choose to switch to the Standard Repayment Plan, which features fixed monthly payments over 10 to 25 years depending on your loan amount. You don't have to wait for automatic enrollment—you can switch plans yourself anytime by contacting your loan servicer or applying through the Federal Student Aid website.
Will I lose forgiveness benefits if SAVE ends?
Under SAVE, any remaining balance is forgiven after 20 years (if you only have undergraduate loans) or 25 years (if you have any graduate loans). If you switch to RAP, forgiveness happens after 30 years of repayment. The specific forgiveness terms depend on which plan you move to, so it's worth comparing options before making a decision. Keep in mind that if you refinance your federal loans with a private lender, you'll lose access to all federal forgiveness programs.
Can I make payments on SAVE right now?
Yes. Even though the payment pause technically ended, many borrowers have continued to have payments waived while on SAVE. You can choose to make voluntary payments—either full payments or interest-only payments—at any time. Making interest-only payments can help prevent your balance from growing while you're not required to pay. Making full payments helps you pay down your debt faster and can save you money on interest over time.
Frequently Asked Questions
What happens to my SAVE plan if it gets eliminated?
If SAVE is eliminated before you pay off your loans, your loan servicer will automatically enroll you in a different repayment plan. The most likely option is the new Repayment Assistance Plan starting July 2026. You can also choose to switch to the Standard Repayment Plan, which features fixed monthly payments over 10 to 25 years depending on your loan amount.
Will I lose forgiveness benefits if SAVE ends?
Under SAVE, any remaining balance is forgiven after 20 years (if you only have undergraduate loans) or 25 years (if you have any graduate loans). If you switch to RAP, forgiveness happens after 30 years of repayment. The specific forgiveness terms depend on which plan you move to, so it’s worth comparing options before making a decision.
Can I make payments on SAVE right now?
Yes. Even though the payment pause technically ended, many borrowers have continued to have payments waived while on SAVE. You can choose to make voluntary payments—either full payments or interest-only payments—at any time. Making interest-only payments can help prevent your balance from growing while you’re not required to pay.
