Some bad news for Americans with student loans.
The Trump administration’s Department of Education announced on Tuesday that millions of borrowers who are enrolled in the Saving on a Valuable Education (SAVE) plan may soon need to select a new repayment plan, part of a settlement with the state of Missouri.
If approved, the move could force millions of Americans to repay their federal student loans, ending the current pause in payments and interest aimed at student debt relief, a holdover from the Biden administration.
What is Saving on a Valuable Education plan, or SAVE?
SAVE is a popular federal student loan income-driven repayment plan (IDR), which caps, or puts a maximum limit, “on how much borrowers must may monthly federal student loan bills at a portion of their income, and it forgives remaining debt after a set number of payments, according to Nerd Wallet.
Why is SAVE ending now?
SAVE has been in legal limbo since February 2025, when the 8th U.S. Circuit Court of Appeals decided the Biden administration was not authorized to establish the SAVE program.
President Donald Trump’s One Big Beautiful Bill Act (OBBBA), which he signed into law this summer, did not renew student loan forgiveness, which is set to expire at the end of this year, which means student loans are eligible to be taxed, once again.
As Mike Pierce, executive director of the Student Borrower Protection Center (SBPC), previously told Fast Company: “There are two things that student loan borrowers need to know: There are changes in the way student debt is taxed, and the other is Congress didn’t extend tax-free student loan forgiveness.”
More than 7.6 million student loan borrowers are in SAVE forbearance, according to Education Department as reported by CNBC. Previously interest-free, SAVE borrower accounts resumed accruing taxes on August 1, according to Nerd Wallet.