Overview
- If the court approves the agreement, the department will halt new SAVE enrollments, deny pending applications, and give current participants a limited time to choose a different repayment plan and restart payments.
- The settlement would vacate the 2023 SAVE final rule with a narrow exception allowing certain deferment and forbearance periods to count toward income-driven forgiveness.
- The deal resolves Missouri-led litigation challenging SAVE’s legality and shifts borrowers from prolonged court limbo to an administrative transition managed by Federal Student Aid.
- Interest on SAVE accounts resumed on August 1, 2025 while borrowers remained in administrative forbearance, and months in that status have not counted toward IDR or Public Service Loan Forgiveness.
- The move accelerates SAVE’s end relative to the 2028 phase-out in federal law, with negotiated rulemaking and servicer outreach to follow and no program-wide transition timetable yet, as advocates warn of higher bills and confusion for millions.