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By Aliss Higham
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A coalition of Republican-led states has asked a federal court to pause a recent ruling that dismissed its lawsuit against the SAVE student loan repayment plan, as the states seek to reinstate an injunction that would again block lower payments and certain forgiveness benefits.
The filing opened a new front in a long-running legal battle over the Biden administration's SAVE (Saving on a Valuable Education) income-driven repayment program, with implications for millions of borrowers who could access reduced monthly payments, interest subsidies and, in some cases, faster timelines to student loan forgiveness.
Why It Matters
At least 7 million federal student loan borrowers have been affected by litigation over the SAVE plan, which placed many accounts in forbearance and limited access to lower payments and cancellation pathways while court orders were in effect.
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The states' latest motion seeks to keep SAVE blocked while they appeal, a step that would again prevent enrollments, reduced payments and the processing of forgiveness under the program if granted.
The outcome could immediately affect borrowers' bills and repayment options, as a recent dismissal by a district court was interpreted by advocates as dissolving the prior injunction and potentially reopening SAVE.
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What To Know
The SAVE plan is an income-driven repayment program created under the Biden administration to lower monthly student loan payments, provide interest subsidies to curb balance growth and, for some borrowers, offer shorter timelines to loan forgiveness compared to other plans.
The Eighth Circuit Court of Appeals issued an injunction blocking SAVE in 2024 in a case led by Missouri and other GOP-led states, which left millions in administrative forbearance.
In December, the Trump administration reached a settlement with Missouri intended to end the litigation by effectively terminating the SAVE plan, and the parties jointly asked the district court to endorse the agreement.
Last week, the district court refused to approve the settlement and dismissed the case as no longer active, finding that there was no ongoing dispute and noting that any future action on SAVE would be up to the Education Department. Congress passed legislation in 2025 to phase out the SAVE plan by 2028, with the proposed settlement described as the final step to end the program.
However, on Tuesday, Missouri and allied states asked the district court to stay its dismissal pending appeal and to maintain the injunction that had blocked SAVE, warning that otherwise applications and relief could resume.
The Education Department and the Trump administration told the court they take no position on the motion, according to the filing reported by Forbes.
What People Are Saying
Julia Barnard, the higher education lead for the Debt Collective, said in a statement: "The Department of Education should immediately implement the SAVE Plan, provide the applicable credits to every single debtor, and immediately process cancellation for all eligible debtors."
Missouri and other states wrote in their motion: "The States ask this Court to respect the Eighth Circuit's prior ruling directing this Court 'to enjoin the entire SAVE Rule.'"
Abby Shafroth, the managing director of advocacy at the National Consumer Law Center, said in a statement: "The court has given the Department a golden opportunity to do right by people struggling with the staggering cost of living and crippling student loan debt."
What Happens Next
The district court will decide whether to grant a stay of its dismissal and maintain the injunction, which would keep SAVE blocked while the states appeal to the Eighth Circuit.
Depending on the court's decision, a revived SAVE plan could allow processing of eligible forgiveness, while a renewed injunction would pause those benefits again.
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