“The Trump administration is not ignoring the growing burden of student debt or the exorbitant cost of a college degree,” Kent and Missouri Attorney General Catherine Hanaway wrote in an op-ed in The Wall Street Journal. “But we refuse to force working Americans to shoulder the burden of loans that are not theirs to bear.”

The impact of the legal battle surrounding the program has been significant. In 2024, several states led by Republican attorneys general, including Missouri, took the case to court, arguing that the Biden administration exceeded its authority. In February 2025, a federal court ruled the SAVE plan illegal. Since then, the status of borrowers has remained uncertain.

As part of that process, millions of SAVE plan users were placed on forbearance in July 2024. During this period, their loans were paused and stopped accruing interest.

However, the truce came to an end when the Department of Education announced it would resume charging interest in August 2025. The advocacy group Protect Borrowers warned that this measure could increase monthly payments by up to $300 due to the new interest charges. The potential elimination of the SAVE plan worries organizations and advocates, who say it will leave borrowers without affordable options. Persis Yu, deputy director of Protect Borrowers, noted that the announced agreement “will deprive borrowers of the most affordable repayment plan.” Given this situation, the Department of Education recommended using the Federal Student Aid Loan Simulator tool to explore alternatives before the changes take effect. Looking ahead, legislation known as the One Big Beautiful Bill Act envisions the creation of a new income-based repayment plan called the Repayment Assistance Plan. This scheme will allow repayment terms of up to 30 years and will be available to new borrowers starting July 1, 2026. A standard plan, different from the current one, will also be offered.

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