Overview
- The proposed settlement with Missouri would dismiss the SAVE litigation and require the department to halt new enrollments, deny pending applications, and move current participants into legally compliant plans.
- Over 7.6 million borrowers in SAVE-related forbearance would get a limited, yet-unspecified window to pick a new repayment option and restart payments if the court approves.
- Interest began accruing again on August 1, 2025 for SAVE borrowers, and time in this forbearance has generally not counted toward IDR or PSLF forgiveness credit.
- Congress had already set a 2028 sunset for SAVE, but the agreement would end the program much sooner, with consumer advocates warning of higher monthly costs and added strain.
- Federal Student Aid plans to contact affected borrowers with instructions, though the department has not set a firm transition timeline and servicers are managing application backlogs.