Tens of Thousands of Student Loan Borrowers Have a Right to Debt Cancellation, Effective Today

February 27, 2026 | WASHINGTON, D.C. — The District Court judge in Missouri v. Trump issued an order dismissing the case without prejudice and refusing plaintiffs’ and the Trump Administration’s request to vacate the Saving on A Valuable Education (SAVE) rule earlier today. As a result of the case being dismissed, the injunction keeping millions of student loan borrowers from making payments in the SAVE plan is no longer in effect, and enrolled borrowers are entitled to its benefits.    

“For almost two years, borrowers in the SAVE plan have been denied their legal rights to lower payments and to debt cancellation,” said Protect Borrowers Legal Director Winston Berkman-Breen. “As of today, not only is there no legal barrier to delivering those rights through the SAVE plan, but the Secretary has a legal obligation to do so. The U.S. Department of Education must immediately identify borrowers who are eligible to have their loans cancelled under SAVE and instruct their student loan servicers to cancel those loans.” 

Although a preliminary injunction was entered in a parallel case, Kansas v. U.S. Department of Education, that injunction was stayed pending appeal by the Court of Appeals for the 10th Circuit. That injunction remains stayed. 

View the order here: https://www.courtlistener.com/docket/68419292/94/state-of-missouri-v-trump/ 

View the decision here: https://www.courtlistener.com/docket/68419292/93/state-of-missouri-v-trump/ 

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, 2024, the Court of Appeals for the 8th Circuit 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. It was entered by the district court on April 14, 2025. Today’s court order effectively vacates that injunction.

About the SAVE plan

The SAVE plan is 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. 

The One Big Beautiful Bill Act sunset the underlying statutory authority (ICR) for the SAVE regulation, but the ICR statute remains effective through the sunset date in 2028. There has also been no final regulation issued at any point to rescind SAVE.

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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.