The incoming Trump administration has taken its first major step to dismantle a key Biden-era program designed to ease the burden of student loans repayment plans, signaling a swift rollback of forgiving policies that have benefited millions of borrowers.
In a court filing submitted Monday to the 8th U.S. Circuit Court of Appeals, the Department of Justice under the new administration requested permission to withdraw entirely from defending the Saving on a Valuable Education (SAVE) plan. Launched in 2023 as an income-driven repayment option, SAVE aimed to lower monthly payments for eligible borrowers and accelerate debt forgiveness after 10 to 25 years, depending on the loan amount and income level. The move comes just weeks after a lower court blocked parts of the program, and it could force an abrupt shift for the roughly 8 million Americans currently enrolled.
The filing argues that the administration no longer wishes to support the legal defense of SAVE, effectively handing the case over to Republican-led states that have challenged the initiative since its rollout. Critics of the plan, including attorneys general from Missouri and other states, contend it exceeds the authority granted by Congress under the Higher Education Act. If the appeals court grants the request, borrowers could see their payments recalculated under older, less generous student loans repayment plans like REPAYE or PAYE, potentially increasing monthly obligations by hundreds of dollars overnight.
For many, the uncertainty is already taking a toll. Advocacy groups report a surge in calls from anxious borrowers unsure how to prepare for possible changes. The National Consumer Law Center highlighted that low-income families and public service workers stand to lose the most, as SAVE capped payments at 5% of discretionary income for undergraduate loans—down from 10% in prior programs—and included provisions for loan forgiveness after a decade of qualifying payments.
The broader assault on Biden’s student debt relief efforts doesn’t stop there. The administration has also signaled intentions to revive lawsuits against the Public Service Loan Forgiveness program and to unwind other income-driven options, according to sources familiar with internal discussions at the Department of Education. During his campaign, President-elect Trump repeatedly vowed to end what he called “wasteful” forgiveness schemes, promising instead to focus on curbing college costs through accountability measures for universities.
Borrower rights organizations urge those on SAVE to continue making payments to avoid default risks, while monitoring updates from the Federal Student Aid office. Legal experts anticipate the appeals process could stretch into mid-2026, but the administration’s hands-off approach may accelerate a nationwide pivot away from expansive student loans repayment plans.
As the dust settles from the election, this early action underscores a clear priority: reorienting federal aid toward stricter repayment structures and away from the progressive reforms of the past four years. For the 43 million Americans grappling with a collective $1.6 trillion in student debt, the path forward remains murky.