The U.S. Department of Education has announced plans to lift the pause on certain student loan repayments as part of a proposed settlement with the state of Missouri.
Eko Hot News reports that the agreement follows Missouri’s lawsuit challenging former President Joe Biden’s SAVE Plan, which aimed to lower monthly payments, reduce interest, and provide loan forgiveness after 10 years.
The SAVE Plan, launched in 2023, replaced the Revised Pay As You Earn Plan. Missouri argued that the Biden administration acted without congressional approval.
Under the proposed settlement, the Education Department will stop enrolling new borrowers into the SAVE Plan. All current participants will be moved into a new repayment structure.
Education Undersecretary Nicholas Kent criticised the previous administration’s approach, saying it attempted to shift student loan burdens onto taxpayers who did not take out loans or attend college.
If approved by the court, all borrowers currently under the SAVE Plan will be required to select a new repayment option and resume payments.
