SAVE Plan Lawsuit: Can Student Loan Borrowers Avoid Being Forced Into New Repayment Plans?

Millions of student loan borrowers enrolled in the SAVE Plan are facing a major change. The program is ending, and borrowers may soon be moved into different repayment plans that could cost them more money each month.

Now, a new lawsuit is trying to stop that from happening.

What's Going On?

The SAVE Plan was created to help borrowers by lowering their monthly payments and offering faster loan forgiveness for some people.

However, critics argued that the Biden administration didn't have the legal authority to create the program. After a series of court battles and settlements, the plan was blocked and is now being shut down.

As a result, the Education Department is getting ready to move SAVE borrowers into other repayment options.

For the past two years, many of these borrowers have been in a holding pattern—their payments were paused, but they also couldn't make progress toward having their loans forgiven.

What Does the Lawsuit Want?

A new legal challenge is asking a federal court to stop the Education Department from forcing borrowers out of SAVE. The lawsuit makes two main arguments:

1. Borrowers who were already enrolled in SAVE should be allowed to stay in the plan while the legal battle continues.
2. Some borrowers who have already met the requirements for loan forgiveness should have their loans canceled instead of being left waiting.

Can Borrowers Actually Stop the Switch?

The honest answer is: maybe, but there are no guarantees.

If the court sides with the borrowers, they could receive temporary protection that keeps them in SAVE while the case moves forward.

However, if the court doesn't step in, borrowers will likely have to pick a new repayment plan within a set time frame. If they don't choose, they could be automatically moved into a different plan.

The Education Department was expected to start sending notices in July, giving borrowers 90 days to leave SAVE.

However, recent court filings suggest that the deadline might be pushed back for some people. Borrowers should pay close attention to any official messages they receive rather than assuming the deadline has changed.

What Should Borrowers Do Now?

The lawsuit does not automatically stop the transition from happening. Until a judge rules otherwise, borrowers should prepare for the possibility that they will have to leave SAVE.

Here's what you can do:

• Check your StudentAid.gov account regularly for updates about your loans.
• Watch for messages from your loan servicer about any changes to your repayment plan.
• Compare your repayment options before making a decision so you can find the best fit for your budget.

The legal case could still change things, especially for borrowers who are close to qualifying for forgiveness. But for now, it's best to stay informed and be ready to act if needed.

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