A federal appellate court has ordered the termination of SAVE, ending a years-long battle over the Income-Driven Repayment (IDR) payment plan that has left millions of student loan borrowers in legal limbo. The ruling is a swift reversal after a federal judge dismissed the State of Missouri’s case against the Department of Education blocking the SAVE plan last month, citing a lack of conflict in the wake of an agreement between the two parties that would terminate the payment plan in exchange for withdrawing the lawsuit. The Dept. of Education’s announcement last December stated that, “If the parties’ joint proposal is approved by the court, borrowers currently enrolled in the illegal SAVE Plan will have a limited time to select a new, legal repayment plan and begin repaying their student loans.” The upper court’s ruling requires the approval of the agreement, likely ending the SAVE plan for good.
Before the appellate court’s ruling, many had hoped that by dismissing the case against SAVE the plan could move forward. Some student loan experts had argued that this decision entitles SAVE borrowers to the benefits of the plan. A lawsuit had even been filed—just hours before the higher court’s decision was announced—that sued for renewed implementation of SAVE. It’s unclear, however, if the lawsuit will now be able to move forward in light of this ruling or how successful it may be, especially given that the 2025 federal spending bill eliminated all IDR plans—including SAVE—phasing them out in 2028.
Our advice for borrowers with the SAVE plan remains the same: apply for a new plan. The ICR and PAYE IDR plans are still available and will remain viable until mid-2028. The clock is ticking, however, as borrowers will no longer be able to apply for them after July 1, 2026. The IBR plan is also available and will remain so indefinitely; it also no longer has a partial financial hardship, meaning all borrowers can apply regardless of income. The most important thing is to get on a plan before borrowers may be automatically placed on a fixed-payment plan. Also, interest is accruing for SAVE borrowers, even if they aren’t making payments.
If you’re one of the seven million borrowers still on SAVE and aren’t sure what to do, get in touch. We’ll help you evaluate the options available to you and compare real numbers as you make the next step on your student loan journey.
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