Another progressive pipe dream has bit the dust as the federal Education Department pulls the plug on Biden’s flagship student loan scheme.
USA Today reported that on Tuesday, the department unveiled a proposed legal settlement to dismantle the Saving on a Valuable Education (SAVE) plan, a program once hailed by the previous administration as a lifeline for struggling borrowers.
This settlement, spurred by challenges from several red states, marks the end of a policy that tied monthly loan payments to borrowers’ incomes.
Back in March 2024, a coalition of red states took aim at SAVE, filing lawsuits to halt what they saw as a federal overreach and a risky handout.
Their persistence paid off, as the newly announced settlement, if greenlit by the courts, will slam the door on new enrollments.
Even more impactful, it will reject pending applications and shift current SAVE participants into alternative repayment plans.
Over 7 million SAVE borrowers, who have been in payment forbearance since June 2024, now face uncertainty.
For these folks, interest on their loans has already started accruing again since August 2025.
The Education Department is offering a narrow window to pick a new plan, nudging borrowers toward other income-driven options with online calculators for payment estimates.
While the Biden team once boasted SAVE as the cheapest repayment path ever, delivering $5.5 billion in relief to nearly half a million, the Trump administration sees it differently.
They’ve called this settlement the decisive end to a nearly $200 billion relief effort for over 5 million Americans, framing it as a fiscal correction.
Nicholas Kent, the education under secretary, didn’t hold back: “The Trump administration is righting this wrong and bringing an end to this deceptive scheme.”
Not everyone’s cheering, as advocacy group Protect Borrowers slammed the deal as a “back-room deal” and “pure capitulation.”
Their deputy executive director, Persis Yu, added: “The real story here is the unrelenting, right-wing push to jack up costs on working people with student debt.”
While it’s easy to sympathize with borrowers caught in this policy shift, expecting taxpayers to foot the bill for unsustainable relief isn’t fairness—it’s just bad economics.
