The Trump administration announced a deal Tuesday to officially end a major student loan repayment program implemented under President Joe Biden.
The Education Department said in a news release that it reached a proposed joint settlement agreement with Missouri to bring an end to Biden’s “Saving on a Valuable Education” plan. Several Republican-led states had sued the department during the Biden administration over the SAVE plan.
The program has been on hold since February, when the 8th U.S. Circuit Court of Appeals sided with Missouri and other red states that challenged the Biden plan.
A judge will have to sign off on the proposed settlement, which calls for the Education Department to not enroll any new borrowers in the plan, deny any pending applications and move all SAVE borrowers into other repayment plans.
The Education Department said that more than 7 million people are enrolled in the plan and that it will begin outreach to affected borrowers in the coming weeks with guidance about how to repay their loans.
“For four years, the Biden Administration sought to unlawfully shift student loan debt onto American taxpayers, many of whom either never took out a loan to finance their postsecondary education or never even went to college themselves, simply for a political win to prop up a failing Administration,” Undersecretary of Education Nicholas Kent in a statement Tuesday. “The Trump Administration is righting this wrong and bringing an end to this deceptive scheme. The law is clear: if you take out a loan, you must pay it back.”
Missouri Attorney General Catherine Hanaway, a Republican, said in the same news release, “We appreciate President Trump’s real, long-term solutions instead of illegal student loan schemes.”
Biden’s effort at broad student loan forgiveness was struck down by the Supreme Court, which found it was an unlawful exercise of presidential power in 2023.
Starsky Wilson, president and CEO of the Children’s Defense Fund, said in a statement that the Trump administration’s “decision to shut down the SAVE program, which addresses higher-education affordability through a flexible, income-driven repayment plan, is out of step with the affordability crisis in the country.”
And Derrick Lewis, the national director working on youth and college at the NAACP, said, ““Eliminating the SAVE Plan will increase the burden of debt for new graduates entering the workforce who are already struggling to build financial stability, while also discouraging future students from pursuing college at all.”
Benjamin Deeter and Jennifer Igbonoba contributed.