SAVE Plan Struck Down, Borrowers Face Higher Payments

The United States — United States Department of Education announced that over 7 million student loan borrowers enrolled in the Biden-era Income-driven repayment (SAVE) plan must now seek new repayment plans. This directive follows a federal court ruling earlier this month by the United States — United States Court of Appeals for the Third Circuit that struck down the SAVE plan. Starting July 1, loan servicers will issue notices, giving borrowers 90 days to select a new repayment plan, with payments resuming as early as this summer. This change is expected to result in significantly higher monthly payments for most affected borrowers, particularly those with low incomes who previously qualified for zero-dollar payments under SAVE. The Trump administration has expressed opposition to loan forgiveness, with Under Secretary of Education Nicholas Kent stating that borrowers are responsible for repaying their loans. Critics, including the Student Borrower Protection Center and Young Invincibles, warn that this policy change will exacerbate an existing affordability crisis and leave borrowers with limited viable options.