The Eighth Circuit Court of Appeals has ended the legal battle over the SAVE student loan repayment plan and instructed a lower court to approve a proposed settlement between the Donald Trump administration and the state of Missouri. The ruling will permanently shut down the program, which was created under the Joe Biden administration.
SAVE was an income-driven repayment plan launched in 2023 to make monthly payments more manageable by tying them to a borrower’s income and family size. It was also designed to limit interest buildup and accelerate loan forgiveness for some low-income borrowers. According to the Department of Education, more than 7 million people are enrolled in SAVE, while another 450,000 borrowers had expressed interest in joining.
Starting July 1, federal loan servicers are expected to notify borrowers that they will have 90 days to move into a different repayment plan. Those who do not make a switch by the deadline will be automatically placed into the Standard Repayment Plan or the new Tiered Standard Plan, which will become available in July.
Kaydee Ambas, a consumer finance professional at Earnest, said ending SAVE removes the most affordable repayment option currently available and many borrowers will feel the impact immediately. She noted that although Congress had already scheduled the plan to sunset in 2028, borrowers were expecting several more years of predictable and lower payments before any transition.
The article also notes that Trump’s One Big Beautiful Bill has reshaped the federal student loan landscape. From July 2026, new federal borrowers will have only two choices: the standard repayment plan and the Repayment Assistance Plan. Under the latter, borrowers will pay 1% to 10% of their income each month for up to 30 years, while the standard plan offers fixed payments over 10 to 25 years.
