December 9, 2025 | WASHINGTON, D.C. — The U.S. Department of Education (ED) today filed a proposed settlement with the State of Missouri to vacate the Biden Administration’s critical student loan repayment plan—the Saving on a Valuable Education (SAVE) plan.

In response, Protect Borrowers Deputy Executive Director and Managing Counsel Persis Yu released the following statement:

“While millions of student loan borrowers struggle amidst the worsening affordability crisis—as the rising costs of groceries, utilities and healthcare continue to bury families in debt, billionaire Education Secretary, Linda McMahon chose to strike a back-room deal with a right-wing state Attorney General and strip borrowers of the most affordable repayment plan that would help millions to stay on track with their loans while keeping a roof over their head. This settlement is pure capitulation—it goes much further than the suit or the 8th Circuit order requires. The real story here is the unrelenting, right-wing push to jack up costs on working people with student debt.”

Background

On March 28, 2024, a coalition of 11 states led by Kansas Attorney General Kris Kobach sued in federal court to stop the Saving on a Valuable Education (SAVE) plan. On April 9, 2024, this lawsuit was filed by another coalition of seven states led by the Missouri Attorney General. These collective states represent about one quarter of the borrowers who have already enrolled in the plan—with more than 2.5 million enrolled residents—but seek to invalidate the SAVE plan for the entire country. On February 18, 2025*, the 8th Circuit Court of Appeals issued an order expanding on an earlier injunction and blocking 8 million student loan borrowers from accessing lower monthly payments and cancellation under the SAVE plan.

About the SAVE plan

The SAVE plan was one of several options for repaying federal student loans. It sets borrowers’ monthly payments based on their income, resulting in low or even $0 payments for low-income borrowers. Most borrowers’ monthly payments will be halved under SAVE. Of the more than 8 million borrowers who have enrolled, 4.6 million have a $0 monthly payment. Additionally, after 20 or 25 years, borrowers enrolled in SAVE can have their remaining balance cancelled. For borrowers who initially borrowed up to $12,000, their remaining balance will be cancelled after 10 years.

The U.S. Department of Education (ED) had already identified nearly half a million borrowers who were eligible to have their debts cancelled under SAVE, totaling nearly $5.5 billion in cancelled debt that will be put back into local economies, used to start businesses or buy homes, or just help hardworking families cover their basic needs. 

The SAVE plan is not a novel use of executive power. Congress gave ED the authority to make Income-Driven Repayment (IDR) plans in 1993 and the first IDR plan was created in 1994. The SAVE plan is the fourth plan based on this authority in recent years and has been available since August 2023.

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*This release has been corrected from February 18, 2024 to February 18, 2025.

About Protect Borrowers

Protect Borrowers (formerly Student Borrower Protection Center) is a nonprofit organization led by a team of experts, lawyers, and advocates fighting to build an economy where debt doesn’t limit opportunity. We investigate financial abuses, take predatory companies to court, and push for policies to protect working people from debt traps. We aim to deliver immediate relief to families while building power, driving systemic change, and fighting for racial and economic justice.

Learn more at protectborrowers.org or follow us on social @BorrowerJustice.