Education Dept settlement would end SAVE plan
A proposed Education Department settlement would end the Biden-era SAVE repayment plan and force millions of borrowers — about 7 million enrolled, including roughly 4.6 million with $0 monthly payments — to resume paying or move to other plans. The department, which estimates SAVE would have cost taxpayers more than $342 billion over 10 years and cites a February 2025 court ruling that found the plan unlawful, says borrowers should use the Federal Student Aid Loan Simulator, and experts expect many may have to exit SAVE forbearance as early as next year, sooner than the July 1, 2028 OBBBA transition date.
📌 Key Facts
- The Trump administration moved to end the SAVE plan for millions of student borrowers.
- The Education Department estimates the SAVE plan would have cost taxpayers more than $342 billion over 10 years.
- Under Secretary of Education Nicholas Kent said Biden-era policies unfairly shifted student loan debt onto taxpayers.
- More than 7 million borrowers were enrolled in SAVE; about 4.6 million of them had $0 monthly payments.
- A federal circuit court ruled the SAVE plan unlawful in February 2025; SAVE borrowers had been placed in forbearance in July 2024 and interest on loans resumed in August 2025.
- Experts now expect borrowers may need to exit SAVE forbearance early next year, a faster timeline than OBBBA’s July 1, 2028 transition deadline.
- The Education Department is advising borrowers to use the Federal Student Aid Loan Simulator to select a new repayment plan.
📊 Relevant Data
Black borrowers represent 14% of the undergraduate borrower population but account for 28% of those in default.
The Student Loan Default Divide: Racial Inequities Play a Role — Pew Charitable Trusts
Black students are more likely to attend for-profit colleges (22% enrollment rate) compared to White students (8%), where default rates are higher (e.g., 3-year default rate of 21% for for-profit attendees vs. 7% for public four-year institutions).
The Student Loan Default Divide: Racial Inequities Play a Role — Pew Charitable Trusts
Black families have a median wealth of $24,100 compared to $188,200 for White families, limiting access to familial financial support for loan repayment.
The Student Loan Default Divide: Racial Inequities Play a Role — Pew Charitable Trusts
Even after adjusting for income, Black borrowers are 1.5 times more likely to default than White borrowers with similar earnings.
The Student Loan Default Divide: Racial Inequities Play a Role — Pew Charitable Trusts
White bachelor's degree holders make 25.5% more in median annual income than their Black counterparts.
Student Loan Debt by Race [2025]: Analysis of Statistics — Education Data Initiative
White college graduates have over 7 times the amount of wealth than Black college graduates.
Student Loan Debt by Race [2025]: Analysis of Statistics — Education Data Initiative
📰 Sources (2)
- Education Department estimates the SAVE plan would have cost taxpayers more than $342 billion over 10 years.
- Under Secretary of Education Nicholas Kent said Biden-era policies unfairly shifted student loan debt onto taxpayers.
- Of more than 7 million SAVE enrollees, about 4.6 million had $0 monthly payments.
- Experts now expect borrowers may need to exit SAVE forbearance early next year, a faster timeline than OBBBA’s July 1, 2028 transition deadline.
- Education Department advises borrowers to use the Federal Student Aid Loan Simulator to select a new repayment plan.
- Background detail reiterated: a circuit court ruled the SAVE plan unlawful in February 2025; SAVE borrowers were placed in forbearance in July 2024, and interest resumed in August 2025.