A federal appeals court overturned a lower court’s dismissal of a lawsuit against the Saving on Valuable Education student loan repayment plan on March 9, which was created by the Biden Administration. This decision will increase strain on borrowers, including those in the Tufts community.
The plan, which had 7.5 million borrowers enrolled as of March, was intended to make federal student loan repayment more affordable, but the Republican-led lawsuit argued that the plan was an overstep of the executive branch’s constitutional power by attempting mass debt cancellation.
The appeals court’s decision likely puts a nail in the coffin of the plan, which was already set to be legally terminated by 2028 under President Trump’s One Big Beautiful Bill Act. The decision, paired with recent Department of Education policy changes such as the cancellation of the Graduate and Parent Loan for Undergraduate Student Programs, leaves students with fewer options when it comes to financing education through federal loans.
On the impact of the SAVE plan’s demise, Professor of Sociology Natasha Warikoo said, “If we think about middle [class] Americans … they’re going to be hit the hardest.”
In a March 27 press release, the DOE announced it will not enroll any new borrowers in the SAVE plan and will move former SAVE plan enrollees onto legal repayment plans. The release also states that, starting July 1, borrowers remaining on the SAVE plan will be given 90 days to enroll in a legal repayment plan.
Borrowers will still have options for income-driven repayment plans offered by the government.
“There are still several other income-driven repayment plan options, including [Pay As You Earn], [Income-Contingent Repayment] and [Income-Based Repayment],” Tufts Student Loan Repayment Advisor Matthew Reardon said.
However, these options are becoming more limited. Both the ICR and PAYE are set to be phased out by July 1, 2028, under the OBBBA. The DOE is launching a new Repayment Assistance Plan, or RAP, but it will not be available until July 1, 2028. For now, most borrowers on the SAVE plan will switch to IBR, according to Reardon.
Compared to the SAVE plan, IBR often results in higher monthly payments, as SAVE calls for undergraduate borrowers to pay 5% of their monthly discretionary income, while the IBR requires 10%. The SAVE plan also often calculates lower discretionary incomes than IBR, leading to lower payments. However, Reardon noted that IBR monthly payments have a cap, while SAVE monthly payments do not, making SAVE worse for high-income borrowers.
The decision works against the Biden administration’s student debt relief efforts. In August 2022, Biden issued an executive order promising to forgive up to $20,000 for certain eligible borrowers. However, a coalition of Republican states sued on the basis that the order exceeded the executive’s authority, and the Supreme Court agreed, ruling against the executive order in June 2023.
This ruling forced the DOE to abandon large-scale cancellation efforts and adopt expanded, income-driven repayment plans such as SAVE.
In early 2024, two state coalitions sued, again arguing the plan was an overreach by the executive branch. Trump’s OBBBA set out to end the plan by 2028, and in December 2025, the now-Trump-run DOE agreed to a settlement that included the program’s termination. There was hope for the program’s temporary revival in February 2026, when a district court unexpectedly dismissed the lawsuit, but that was short-lived after a federal appeals court overturned the decision.
This decision will likely increase stress on borrowers in the Tufts community.
“We can surmise that a number of alumni did enroll in the SAVE Plan because it was the most affordable repayment plan,” Reardon said.
Alternative repayment plans present challenges, including higher monthly payments and less favorable terms. With the cost of attendance at Tufts rising to $89,292 in the 2024–25 academic year, students may struggle when planning long-term decisions around student debt.
Many borrowers do not want to switch plans because SAVE reduced financial pressure.
“There was little incentive to switch … out of it, as any borrower on the SAVE plan had their loans placed into administrative forbearance, which meant no required monthly payments and no interest accrual,” Reardon said.
Beyond these immediate effects, these policy changes also reflect a great shift in federal policy. With the DOE’s move to cut back on programs like SAVE or eliminate initiatives like the Graduate PLUS loan program, there has been a clear signal to reduce financial support for higher education. These decisions have placed a financial burden on middle-class Americans who are not low-income enough to receive generous federal aid or high-income enough to avoid debt.
“I think there is agreement that we want every young person to have the opportunity to pursue education, to get educated in pursuit of a better future,” Warikoo said.
