Four student loan borrowers filed an amended lawsuit this week seeking to block the Education Department’s plan to force millions of SAVE plan borrowers into different repayment plans starting in July, according to reporting from Forbes and The College Investor. The plaintiffs argue that borrowers should instead receive loan forgiveness if they qualify, or be transferred to the REPAYE plan rather than moved to less affordable options.
The amended complaint, filed June 23 in U.S. District Court for the District of Columbia, contends that the Education Department’s handling of the SAVE plan’s termination was unlawful. According to Forbes, the lawsuit argues that Congress authorized the termination of SAVE only in legislation passed last year, but that legislation does not mandate the termination until 2028. The plaintiffs claim that because there was a period during the litigation when SAVE was not blocked, borrowers who qualify should be able to receive the plan’s benefits, such as loan forgiveness after 20 or 25 years of payments.
The lawsuit also challenges what the plaintiffs call a “shadow repeal” of REPAYE, the Revised Pay As You Earn plan that predated SAVE. According to the amended complaint quoted by Forbes, the Department decided to terminate REPAYE “based on political expediency and behind the veil of ‘settlement negotiations'” without notice-and-comment rulemaking or consideration of borrowers’ reliance interests. The plaintiffs requested a preliminary injunction to temporarily block the Education Department’s efforts to move borrowers off SAVE or REPAYE.
On June 24, a federal judge ordered the Education Department to file a response by July 1, with a hearing scheduled for the week of July 13, according to The College Investor. However, the department has already moved to dismiss the lawsuit, arguing that a D.C. court cannot override the Missouri court that approved the settlement ending the plan. “There is no SAVE Plan Final Rule for this Court to enforce, so Plaintiffs’ complaint automatically fails,” the department wrote in its motion to dismiss, as reported by Forbes.
Starting in early July, the Education Department will begin notifying SAVE plan borrowers that they have 90 days to select a new repayment plan or be moved to a Standard plan automatically, according to the Department of Education’s March 2026 press release cited by Forbes. This follows a settlement agreement reached in December 2025 between the Trump Administration and the State of Missouri to terminate both SAVE and REPAYE, ending years of litigation over the plans.
The SAVE plan, launched in 2023 as a rebrand of REPAYE, was intended to be the most affordable income-driven repayment option available. However, Republican-led states filed legal challenges to block it, and the Eighth Circuit Court of Appeals issued a nationwide injunction in 2024 blocking the program, forcing millions of borrowers into involuntary forbearance. The forbearance paused payments and interest accrual but also suspended progress toward loan forgiveness. The legal challenges ultimately ended this spring after the Education Department agreed to settle and terminate both plans, according to Forbes.
Similar borrower-side lawsuits over SAVE and REPAYE have not reversed the wind-down, according to The College Investor. Unless the judge issues a ruling quickly, the July notices to borrowers will proceed on schedule. Borrowers should monitor developments in the case but plan on selecting a different income-driven repayment plan to maintain access to affordable payments and progress toward eventual loan forgiveness, according to advice from Protect Borrowers cited by Forbes.
Sources
- Forbes — Amended lawsuit details, borrower arguments, Education Department response, SAVE plan background and settlement history
- The College Investor — Lawsuit filing date, court scheduling, judge’s order, context on past borrower lawsuits
- U.S. Department of Education — July transition timeline, 90-day deadline for borrowers, March 2026 press release
- Protect Borrowers — Advice on borrower planning and timeline
