Education Dept settlement would end SAVE plan
The U.S. Department of Education announced a proposed settlement on Dec. 9, 2025 to end the Biden‑era SAVE income‑driven repayment plan, pending court approval in lawsuits led by Missouri. The deal would halt new SAVE enrollments, deny pending applications, and transition roughly 7 million current SAVE borrowers to other repayment plans, with borrowers given a limited window to select fixed or income‑based options ahead of new OBBBA plans launching in July 2026.
📌 Key Facts
- DOE proposes ending SAVE via settlement; court approval required.
- About 7 million SAVE enrollees would be moved to other plans; new SAVE enrollments and pending applications would be stopped/denied.
- Borrowers must choose between fixed payment plans or income‑based plans; OBBBA’s revised standard plan and new Repayment Assistance Plan roll out July 2026.
- Under OBBBA, a plan‑change deadline had been July 1, 2028; the settlement would move the transition earlier (exact timeframe not yet provided).
- Interest began accruing on SAVE loans in August; servicers warn reentry to repayment will be ‘bumpy’ after years of pauses.
- AEI analysis cited: 5.5 million in default, 3.7 million >270 days late, 2.7 million earlier‑stage delinquent (≈12 million behind overall).
📊 Relevant Data
Black bachelor's degree holders have an average of $52,726 in student loan debt, compared to lower averages for White and Asian graduates.
Student Loan Debt by Race [2025]: Analysis of Statistics — Education Data Initiative
Over 50% of Black student borrowers report their net worth is less than they owe in student loan debt, while 52% of Asian and White student borrowers have a net worth that exceeds their student loan debt.
Student Loan Debt by Race [2025]: Analysis of Statistics — Education Data Initiative
66% of Black students use student loans to pay for school, compared to 47.4% of White undergraduate students; Black students receive 14.55% of student loan money while comprising about 13% of the US population.
Student Loan Debt by Race [2025]: Analysis of Statistics — Education Data Initiative
Over the past 20 years, 50% of Black student loan borrowers and 40% of Hispanic or Latino borrowers have experienced a loan default, compared to 29% of White borrowers; Black borrowers comprise about 13% of the US population but face higher per capita default risks.
The Student Loan Default Divide: Racial Inequities Play a Role — The Pew Charitable Trusts
70% of Black student loan borrowers had 2019 household incomes under $50,000, compared to 49% of Hispanic or Latino and 34% of White borrowers, contributing to higher default rates.
The Student Loan Default Divide: Racial Inequities Play a Role — The Pew Charitable Trusts
45% of Black student loan borrowers did not complete their programs, compared to 27% of Hispanic or Latino and 32% of White borrowers, leading to debt without income benefits and higher default risks.
The Student Loan Default Divide: Racial Inequities Play a Role — The Pew Charitable Trusts