A major shift in U.S. student loan policy is unfolding after the Trump administration reached a settlement with seven Republican-led states to dismantle Save. This is the flagship income-driven repayment plan created under Biden. The agreement, now awaiting court approval, would force roughly 7 million borrowers to leave the program, freeze new enrollments, and begin a process to formally repeal the regulation. The move injects new uncertainty into an already strained repayment system and could significantly raise monthly costs for millions.
Borrowers who relied on Save’s lower payments and accelerated forgiveness windows now face a limited set of more expensive alternatives. Servicers are already buried under backlogs, and other income-driven plans are slated to phase out by 2028 because of the Trump-era tax law. Consumer advocates warn that forcing people out of Save without clear timelines, guidance, or comparable options risks throwing many into fall behind on payments. Particularly low-income borrowers and public sector workers who had counted on consistent payment histories for loan forgiveness programs.
Competing Narratives and Mounting Pressure on Borrowers
Supporters of the settlement, including officials from the participating states and the Trump administration, frame it as a necessary correction to what they call unlawful federal overreach and an unfair burden on taxpayers. They argue that generous repayment terms exceeded congressional authority and shifted costs to Americans without college degrees.
Opponents counter that the political motivations behind the lawsuit and settlement are clear, pointing to longstanding Republican resistance to large-scale loan relief. Advocacy groups criticize the administration for bowing to pressure and upending the lives of millions of borrowers who built budgets around Save’s protections. Testimonies from individual borrowers highlight steep payment increases, financial strain, and fear of losing progress toward Public Service Loan Forgiveness.
The long legal battle over Save—spanning two presidencies, multiple injunctions, and billions in frozen payments—underscores how deeply polarized the issue of student debt has become. As the Education Department prepares to transition millions into new plans and repeal the program entirely. Now borrowers are left to navigate rising living costs, unstable repayment options, and a political landscape that continues to shift beneath them.
Reference
Douglas-Gabriel, D. (2025, December 9). Trump administration strikes deal to end Biden’s student loan repayment plan. The Washington Post. https://www.washingtonpost.com/education/2025/12/09/trump-ends-biden-save-student-loan-plan/