If your student loan payments are on pause under the Saving on a Valuable Education (SAVE) Plan, get ready for major changes. On December 9, 2025, the US Department of Education (ED) reached a joint settlement agreement with the State of Missouri to bring an end to the SAVE program, impacting nearly 8 million borrowers.
Often criticized and regarded as illegal—because it lacked congressional authorization during the Biden Administration—the SAVE Plan allowed borrowers to pay as little as zero dollars per month. This, coupled with ongoing legal battles regarding the program, has left many borrowers in a state of limbo.
What Does This Mean for You Right Now
As you may have heard, the One Big Beautiful Bill Act (OBBBA) established a July 1, 2028 expiration date for the SAVE program. Well, that could change by early 2026 (although a specific date has not yet been provided).
The new settlement agreement means anyone currently enrolled in SAVE will have to move to a different repayment plan. It also means ED will not enroll any new borrowers in the plan moving forward.
As of August 2025, interest began accruing again for loans covered in the SAVE plan. Now, borrowers will be required to choose another repayment plan; one that does not carry benefits as generous as SAVE.
Can I Still Qualify for an Income Driven Plan
One of the most popular features of the SAVE plan was that it was income driven. But there are other income-based and income driven repayment plans available. Which plan you qualify for will depend on certain criteria. Namely:
- When you borrowed your loans
- Your discretionary or Adjusted Gross Income (AGI)
The Timeline and Your Next Steps
If the court approves the settlement agreement, ED will officially discontinue the SAVE plan. Missouri’s Attorney General, as well as AGs from Arkansas, Florida, Georgia, North Dakota, Ohio, and Oklahoma, challenged the legality of SAVE in April 2024.
By February 2025, the U.S. Court of Appeals blocked full implementation of SAVE, which required ED to end the 0% interest rate. In July 2025, borrowers were notified that interest would begin accruing on their loans under the SAVE forbearance, effective August 1st.
Fast forward to December 2025. Following the agreement—and in anticipation of the court’s favorable ruling—you will have limited time to enroll in a new plan.
Getting Prepared
- Use the Office of Federal Student Aid (FSA) Loan Simulator to start comparing other repayment options
- Monitor your inbox and mailbox for any communication from your loan servicer(s)
- If your phone number, email, mailing address, legal name or any other pertinent information has changed, alert your loan servicer right away
