A federal judge has rejected the Trump administration’s attempt to dismantle the SAVE student loan repayment plan, preserving the program for millions of borrowers. The decision upholds the plan’s continuation amid ongoing legal and policy challenges.
- Over 27 million borrowers are enrolled in the SAVE repayment plan
- The plan has led to $41 billion in principal balance cancellations
- More than 14 million borrowers pay $0 monthly under SAVE
- Federal judge ruled that the plan was implemented within statutory authority
- The decision preserves the program’s operation across all U.S. states
- The ruling strengthens judicial precedent for administrative rulemaking in education policy
A U.S. District Court judge has dismissed a legal challenge filed by former Trump administration officials seeking to terminate the Saving on a Valuable Education (SAVE) repayment plan. The ruling affirms the plan’s status as a legally valid federal program, countering efforts to rescind it based on procedural and policy grounds. The SAVE plan, launched in 2023, has been adopted by over 27 million borrowers nationwide, making it the most widely used income-driven repayment option in the country’s student loan system. The court’s decision comes after the Department of Education under the Trump administration argued that the SAVE plan was implemented without sufficient rulemaking procedures and exceeded statutory authority. However, the judge found that the plan was promulgated in accordance with existing federal law and that the administration failed to provide evidence of material harm or legal violation. The ruling emphasizes that the Department of Education has broad discretion in designing repayment programs aimed at reducing borrower burden. Key figures in the decision include the plan’s average monthly payment of $0 for more than 14 million borrowers with incomes below 225% of the federal poverty level. Additionally, the program has led to the cancellation of over $41 billion in principal balances since its inception, benefiting low- and middle-income borrowers. These numbers underscore the plan’s significant impact on financial relief and access to higher education. The outcome affects millions of student loan borrowers across all 50 states, particularly those in lower-income brackets and recent college graduates. It also sets a precedent for future administrative actions on federal student aid programs, reinforcing judicial oversight of executive branch decisions in social welfare policy. The Department of Education has indicated it will continue to administer the SAVE plan under current rules.