By Today, the U.S. Department of Education announced a proposed joint settlement agreement with the State of Missouri that would end the Biden Administration’s illegal ‘Saving on a Valuable Education’ (SAVE) Plan. The SAVE Plan was the Biden Administration’s third and final attempt at mass federal student loan forgiveness, and it was blocked repeatedly by both district and appeals courts.
Without congressional authorization, the Biden Administration misled millions of borrowers into the illegal SAVE Plan with false promises of artificially low monthly payments – oftentimes as low as $0 – and a short timeline to student loan “forgiveness.” The SAVE Plan would have cost taxpayers, many of whom did not attend college or already repaid their student loans, more than $342 billion over ten years.
As part of the proposed joint settlement agreement, the Department will not enroll any new borrowers in the illegal SAVE Plan, deny any pending applications, and move all SAVE borrowers into legal repayment plans. If the agreement is approved by the court, it will mark the definitive end of the Biden Administration’s illegal student loan bailout agenda, putting it to rest once and for all, and end the limbo that more than 7 million borrowers currently face when it comes to not being able to make payments on their federal loans.
“For four years, the Biden Administration sought to unlawfully shift student loan debt onto American taxpayers, many of whom either never took out a loan to finance their postsecondary education or never even went to college themselves, simply for a political win to prop up a failing Administration,” said Under Secretary of Education Nicholas Kent. “The Trump Administration is righting this wrong and bringing an end to this deceptive scheme. The law is clear: if you take out a loan, you must pay it back. Thanks to the State of Missouri and other states fighting against this egregious federal overreach, American taxpayers can now rest assured they will no longer be forced to serve as collateral for illegal and irresponsible student loan policies.”
“Our Office fought for hardworking Americans who were being preyed upon by Biden Administration bureaucrats, and we won in court every time,” said Missouri Attorney General Catherine Hanaway. “Unilaterally saddling taxpayers with someone else’s Ivy League debt ignored Congressional authority and was clearly unlawful. We appreciate President Trump’s real, long-term solutions instead of illegal student loan schemes.”
The Department, through its Office of Federal Student Aid (FSA), will provide support to borrowers currently enrolled in the illegal SAVE Plan in selecting a new, legal repayment plan that helps put them on the path to a sustainable financial future while safeguarding the interests of American taxpayers. The Department will begin direct outreach to impacted borrowers to provide guidance about how to repay their student loans in the coming weeks.
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