Student Debtors Ask Court to Reconsider Decision to Eliminate the SAVE Student Loan Plan

FOR IMMEDIATE RELASE

CONTACT:

Natalia Abrams

natalia@studentdebtcrisis.org

Filings say that the court killed the SAVE Plan unlawfully, substituting “private negotiation for judicial resolution”

Washington, D.C. — Last Friday, Public Goods Practice, LLP (PGP) filed a motion to intervene in a federal lawsuit to protect the SAVE student loan repayment plan. Four student loan borrowers represented by PGP are asking a District Court Judge to reconsider his prior order in Missouri v. Trump that seeks to  eliminate the SAVE Plan. The borrowers argue that the court’s decision unlawfully vacated the SAVE Plan after both the Trump Administration and plaintiff states jointly requested its dissolution, leaving the interests of millions of borrowers unrepresented.

Over the past couple of weeks, courts made numerous conflicting orders in Missouri v. Trump. “In the span of eleven days, millions of student loan borrowers went from having full legal entitlement to loan discharge and affordable repayment under the SAVE Final Rule, to having that rule vacated by a two-sentence court order entered at the joint request of two non-adversarial parties,” the filings explain.

“The Eighth Circuit’s mandate to vacate the SAVE Final Rule is a manifest error of law,” said Austin Hinkle, Managing Partner of Public Goods Practice. “If the Administration wants to raise monthly student loan payments by hundreds of dollars for my clients and the millions of Americans like them, it should do that through the appropriate legal process.”

In following the direction of the Eighth Circuit’s mandate, the Court neglected Congress’s direction, failed to consider the interests of borrowers, and exceeded its authority, the filings explain. With the passage of the One Big Beautiful Bill Act (OBBBA), Congress ratified the SAVE Final Rule and explicitly chose to provide borrowers with a long transition period (through July 2028) in order to avoid exactly the type of chaos and confusion that millions are now facing. 

If the court does not reconsider the case, the consequences will be immediate and severe for millions of borrowers, as they will face higher monthly payments and additional years of repayment.

“Americans are struggling to pay for their basic needs,” said Julia Barnard, former Student Loan Ombudsman of the Consumer Financial Protection Bureau and current Higher Education Director at the Debt Collective. “It is truly cruel and unwise for the Trump Administration and the attorneys general of the states in this action like Missouri, Georgia, and Florida to work this hard to raise monthly payments for millions of people.”

“The recent ruling to end SAVE will cause me direct, severe financial harm by depriving me of the loan forgiveness I was promised and increasing my monthly payments on my remaining loans by hundreds of dollars,” said Plaintiff Heather Havens. “Meanwhile rent continues to rise, gas is going up, and my car insurance has increased by 30%. For me, asking the court to reconsider its ruling isn’t just about fairness; it’s a matter of basic survival.”

These filings come only one week after four borrowers filed a lawsuit (Havens v. U.S. Department of Education) to sue the administration alleging that the Department’s refusal to implement the SAVE Plan Final Rule violates federal administrative law by denying them the relief they are entitled by regulation and statute.

The filings are available here: https://www.courtlistener.com/docket/68419292/state-of-missouri-v-trump/?filed_after=&filed_before=&entry_gte=&entry_lte=&order_by=desc 

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Background

As Trump scrambles to contain the economic fallout of skyrocketing gas prices, his administration is blocking working class families’ rights to affordable loan payments and debt relief. The SAVE plan lowers monthly payments for borrowers enrolled in income-driven repayment and prevents unpaid interest from causing loan balances to balloon — reforms designed to ensure that student loan repayment remains affordable. But instead of doing its job and opening up the SAVE plan, the Administration is giving borrowers the run around and denying access to the most affordable payment plan in history. 

“Millions of borrowers enrolled in the SAVE program in good faith because they were promised an affordable, fair path out of student debt,” said Natalia Abrams, President and Founder of the Student Debt Crisis Center. “Now, that promise is being threatened by political and legal maneuvering that is happening without borrowers’ voices in the room. People who followed the rules and trusted this program should not be punished with higher payments and deeper uncertainty about their financial futures."

If the SAVE Plan expires, families will pay thousands of dollars more per year (see below) to repay their student loans, according to an analysis from Protect Borrowers.

Congress recently ratified the SAVE program in passing the One Big Beautiful Bill Act by reaffirming the legal authority underlying the plan and establishing a transition period allowing borrowers to remain in the program through July 1, 2028. Rather than complying with this direction and smooth borrowers’ transitions, the Administration is putting millions of borrowers at risk of delinquency and default.

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About Student Debt Crisis Center

Student Debt Crisis Center is a national advocacy organization with 2,000,000 supporters calling for fundamental reforms to student loan policies and an end to the student debt crisis. Learn more here.