The Trump administration announced a joint agreement with Missouri to end the Biden administration’s Saving on a Valuable Education student loan forgiveness plan, its third and final attempt to do so.
The joint settlement agreement entails forbidding new borrowers from joining the SAVE plan and moving all enrollees into legal repayment plans. The settlement is pending approval by the court, but if approved, it would mark the definitive end of the Biden administration’s student bailout initiatives.
“For four years, the Biden Administration sought to unlawfully shift student loan debt onto American taxpayers, many of whom either never took out a loan to finance their postsecondary education or never even went to college themselves, simply for a political win to prop up a failing Administration,” Undersecretary of Education Nicholas Kent said in a statement.
“The Trump Administration is righting this wrong and bringing an end to this deceptive scheme. The law is clear: if you take out a loan, you must pay it back. Thanks to the State of Missouri and other states fighting against this egregious federal overreach, American taxpayers can now rest assured they will no longer be forced to serve as collateral for illegal and irresponsible student loan policies,” he added.
Education Secretary Linda McMahon stressed the financial cost the program would have had on taxpayers if it went through.
“The Biden Administration’s illegal SAVE Plan would have cost taxpayers, many of whom did not attend college or already repaid their student loans, more than $342 billion over ten years. We won’t tolerate it,” she said in a post on X.
EDUCATION DEPARTMENT HALTS STUDENT LOAN FORGIVENESS PLAN TO ‘RECALCULATE’ AFTER ROLL BACKS
The SAVE program lowered monthly payments for low-income borrowers and allowed the debt forgiveness of those whose original balances were $12,000 or less after 10 years. It was quickly challenged in court, where a lengthy legal battle ensued. Tuesday’s move by the Department of Education could mark the final blow to the program.
The education department pledged to provide support to borrowers enrolled in the program, helping to guide them to other repayment plans outside of legal limbo.
