FILE – Education Secretary Linda McMahon speaks in the East Room of the White House, Sept. 4, 2025. The Education Department scored a victory last week against a group of student loan borrowers who are seeking to revive the SAVE plan. (AP Photo/Alex Brandon, File)
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Student loan borrowers who tried to intervene in a legal battle over the SAVE plan suffered a legal setback last week after a court ruled against them. The loss comes as the Education Department continues its push to force borrowers with student loans in the SAVE plan to move to other, more expensive repayment programs. Meanwhile, a separate legal challenge over the department’s efforts to terminate SAVE is ongoing, with key developments expected to occur during August.
Here’s the latest on what’s happening with the SAVE plan, and what impacted federal student loan borrowers need to know.
Student Loan Borrowers Had Sought To Intervene In SAVE Plan Litigation
Earlier this year, a long-running legal battle over the future of the SAVE plan (a Biden-era income-driven repayment plan that provided affordable monthly payments and eventual student loan forgiveness) came to an end. The Trump administration and the group of Republican-led states that had originally filed suit against the Biden-Harris administration came to a settlement agreement that vacated the rules governing SAVE, essentially ensuring its termination.
Separately, Congress and President Trump also terminated the SAVE plan upon enactment of the One Big, Beautiful Bill Act, which has made substantial changes to federal student loan programs. However, that legislation would have kept SAVE intact until 2028. After a federal appeals court ordered a district court judge to implement the settlement agreement in March, the SAVE plan effectively came to an end.
After the final judgment in the SAVE plan litigation was entered, a group of four student loan borrowers filed a motion to intervene in the lawsuit, arguing that they had an interest in the outcome of the litigation and that, during a brief period of the litigation when technically there was no court order blocking the SAVE program, they should have been entitled to the plan’s benefits. That would have included student loan forgiveness, if they were eligible.
“In the span of eleven days, millions of student loan borrowers went from having full legal entitlement to loan discharge and affordable repayment under the SAVE Final Rule, to having that rule vacated by a two-sentence court order entered at the joint request of two nonadversarial parties,” wrote the borrowers in their motion to intervene in March. “The consequences for those borrowers are immediate and severe. Millions may be facing life-changing economic costs from decades of additional student loan payments. No court has found the SAVE Final Rule unlawful. No adversarial brief was filed in support of the vacatur. No party represented the interests of the borrowers affected. It is clear at this point that the Proposed Intervenors, themselves student loan borrowers, interests are no longer being protected and move to intervene to challenge the legal authority under which the vacatur was entered and to seek reconsideration of an order that substituted private negotiation for judicial resolution.”
Court Rejects Efforts By Student Loan Borrowers To Intervene In SAVE Plan Legal Battle
But last Thursday, the federal District Court for the Eastern District of Missouri, which has been overseeing the SAVE plan litigation for much of the last three years, rejected the request of the student loan borrowers to intervene in the case. The court found that the motion to intervene, filed days after the final judgment vacating the SAVE plan rules was entered, was untimely.
“On March 13, 2026, three days after the Court entered this final judgment, Proposed Intervenors requested to join this action for the first time to request that the Court reconsider its final judgment and remand the SAVE Plan Final Rule to the Department of Education without vacating it,” wrote the court in its ruling. “Proposed Intervenors are borrowers of federal student loans who were enrolled in, or eligible to enroll in, the SAVE Plan. They contend that they gained new rights on February 27, 2026 when the SAVE Plan was revived by the order of dismissal. They allege that once the case was dismissed, the preliminary injunction was lifted, the SAVE Plan was revived, and the Department of Education should have honored its terms. Namely, Proposed Intervenors sought to obtain an immediate discharge of certain loans under the terms of the SAVE Plan.”
“The Court finds that the relevant factors weigh against intervention,” said the court, siding with the Education Department’s arguments that the litigation was already quite advanced, and that reopening the case now would cause a “monumental upheaval” for the department and for federal student loan repayment programs.
“Proposed Intervenors’ motion is untimely given the substantial progress of this litigation, their prior knowledge of this action and the parties’ position, the insufficiency of their proposed excuses for delay, and the prejudice the parties would face if this case is reopened,” concluded the court.
Second Legal Battle Over Student Loan Repayment Continues
While the court’s ruling is a setback for student loan borrowers hoping to revive the SAVE plan, a separate legal challenge against the Education Department over its efforts to force borrowers into other repayment plans is continuing. In that case, the challengers are trying to block the department from continuing to move borrowers into other repayment programs (which are almost universally more expensive, resulting in skyrocketing student loan payments for many individuals). They argue that the department instead should move borrowers into the repayment plan that preceded SAVE, the REPAYE plan.
After the SAVE plan was terminated, the Education Department “decided not to follow the law and revert to the REPAYE repayment plan – established by a valid final rule – without any rulemaking, without considering the relevant data or the reliance millions of borrowers placed on the plan, and without any explanation for its action,” wrote the challengers in their request for a preliminary injunction filed in June. “This ‘shadow repeal’ of REPAYE made the plan inaccessible despite clear law requiring the agency to revert to the prior existing rule after the vacatur.”
The Education Department disputes the challengers’ arguments, contending that both SAVE and REPAYE have been vacated as a result of the court order implementing the department’s settlement agreement with the states. Key developments in the case are expected to occur during August including additional briefing and the potential scheduling of a hearing on the challenger’s motion for a preliminary injunction.
In the meantime, borrowers are receiving conflicting information from student loan borrower advocacy organizations. Some are recommending that borrowers in the SAVE plan remain in the forbearance for as long as they can while the litigation continues. Others are noting that between the recent court rulings and legislation passed by Congress, borrowers must accept that SAVE and REPAYE are dead, and they should start moving their student loans into other available income-driven repayment plans if they can afford the payments and want to resume making progress toward student loan forgiveness.
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