Has your student loan forgiveness plan been blocked? Here’s what you can do if you’re enrolled in SAVE
Four federal student loan repayment plans have been halted by President Donald Trump, sparking confusion for borrowers.
Borrowers across the country are left in a state of uncertainty after President Trump moved to strike down four popular federal programs offering student loan forgiveness.
Those initiatives are known as income-driven repayment (IDR) plans, meaning that higher earners will get less support. The plans include the Income-Based Repayment, Income-Contingent Repayment, Pay As You Earn and the SAVE plan. Their status is currently being contested in the courts after the Trump administration’s Department of Education halted enrolment in the plans.
Around 8 million borrowers are currently enrolled in the SAVE plan but now find themselves stuck in forbearance while they await a ruling from the 8th Circuit Court of Appeals. This means that no further interest will be added to the total until the situation has been resolved.
However CNBC recommends that borrowers who had previously been enrolled in SAVE should now enrol in another plan. Of the four IDR plans introduced by Biden, only the Income-Based Repayment is currently live and offering debt cancellation.
Why has Trump blocked the SAVE plan?
The Saving on A Valuable Education, or SAVE, plan was introduced by the Biden administration as part of the bid to ease the burden on student loan borrowers. However the plan was blocked last month. The Trump administration is trying to strike down the initiatives introduced by President Biden, arguing that they were illegal.
The Biden administration advertised the SAVE plan as “the most affordable student loan plan ever” but it was quickly the subject of legal challenges. A number of GOP-led states launched lawsuits claiming that it was Biden’s attempt to circumnavigate a Supreme Court block on widespread debt cancellation.
Last April the suit from seven Republican states claimed: “Yet again, the President is unilaterally trying to impose an extraordinarily expensive and controversial policy that he could not get through Congress.”
For now, the program is at a stand-still with borrowers left to wait. The Trump administration has began 2025 with a frantic pace of activity, pushing to make changes early on in the President’s second term. The SAVE plan will likely be a key target for officials looking to cut government spending and we could see a verdict delivered in the coming months.
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