Trump Administration Moves To End Biden-Era Student Loan Relief For 7.6 Million Borrowers

The Trump administration has put forward a proposal that could potentially bring millions of borrowers back into repayment from the Biden-era payment pause.

Over 7 Million Borrowers To Be Brought Under Repayment

The U.S. Department of Education on Tuesday announced a proposed joint settlement with Missouri, which could lead to the end of the Saving on a Valuable Education (SAVE) plan. This plan was established by the Biden administration to provide relief to student loan borrowers.

Under the proposed settlement, the Education Department is pledging not to enroll new borrowers in the SAVE program and to place all existing participants into legally recognized repayment plans. As of July, over 7.6 million borrowers were enrolled in the SAVE forbearance program, as per the Department.

According to the Department of Education, the SAVE Plan was projected to cost taxpayers, many of whom never attended college or have already paid off their loans, over $342 billion across ten years.

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Settlement Ends Biden-Era Loan Relief

The proposed settlement marks a significant development in the ongoing debate over student loan relief. Earlier in July, the Trump administration had announced the expiry of the Biden-era student loan relief plan, warning borrowers of an impending interest charge.

The 8th U.S. Circuit Court of Appeals had earlier supported the Republican-led states, ruling that former President Joe Biden did not have the authority to enact the student loan relief program. The SAVE plan, designed to reduce monthly payments and accelerate debt forgiveness for borrowers with smaller balances, has been on hold since February.

In June, Republican lawmakers proposed changes to federal student loan programs, potentially increasing the cost of college and deepening inequities. Additionally, the tax-free student loan forgiveness is set to expire in 2026, raising concerns about a potential student loan tax bomb for borrowers.

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