A serious legal challenge brought by student loan borrowers over efforts by the Education Department and Secretary of Education Linda McMahon to dismantle the SAVE plan reached a critical stage this week. The challengers hope to block the department from continuing to force SAVE plan borrowers to move their student loans onto other, more expensive, repayment plans. With briefing now completed on the challengers’ motion for a preliminary injunction to halt the department’s efforts, the court could issue a ruling in the relatively near future.

The SAVE plan, a popular income-driven repayment program launched under President Biden in 2023, has been blocked for more than two years after Republican-led states filed legal challenges arguing the program was an unlawful executive branch overreach. Those states then reached a settlement agreement with the Trump administration last December, which a federal judge ultimately entered into court in March. Under the terms of that settlement agreement, the regulations governing the SAVE plan have been vacated, effectively terminating the program.

Following the entry of the settlement agreement, the Education Department has been systematically pressuring borrowers to move their student loans out of SAVE and into other repayment programs. But the process has been bumpy, and the challengers in the latest lawsuit claim it is unlawful. Here’s where things stand, and what student loan borrowers should know.

Education Department Pressures Borrowers To Move Student Loans Out Of the SAVE Plan

The Education Department has been telling borrowers for months that they need to move their student loans out of the SAVE plan and into other repayment programs. The department sent out a series of preliminary notices starting in March, warning borrowers that their time remaining in the SAVE plan was coming to an end. Then, starting in July, the department’s contracted student loan servicers began sending out official letters giving borrowers 90 days to enroll their........

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