What Is the SAVE Plan Forgiveness Lawsuit?
The SAVE plan forgiveness lawsuit is a set of federal court cases over whether the Education Department could forgive student loans under the Saving on a Valuable Education (SAVE) repayment plan. The main case, Missouri v. Trump (No. 4:24-cv-520, E.D. Mo.), was brought by seven states and ended in a March 2026 judgment vacating the SAVE rule. A separate borrower case, Havens v. U.S. Department of Education (No. 1:26-cv-00816, D.D.C.), now asks a court to order the forgiveness that SAVE promised.
The Education Department published the SAVE rule on July 10, 2023, as an income-driven repayment plan that replaced the older REPAYE plan. SAVE capped payments at a share of discretionary income, set a $0 payment for borrowers below 225% of the federal poverty line, and promised forgiveness after 10 years for balances of $12,000 or less and after 20 or 25 years for larger ones. Protect Borrowers reports that more than 8 million borrowers enrolled.
This is not a class action, so there is no claim form and no settlement fund. The sections below cover what each side alleges, where each case stands and what the 2025 settlement changed.
“On April 9, 2024, Plaintiffs filed a complaint challenging the legality of portions of a final rule titled Improving Income Driven Repayment for the William D. Ford Federal Direct Loan Program and the Federal Family Education Loan (FFEL) Program, 88 Fed. Reg. 43,820 (July 10, 2023), and subsequently filed a motion for preliminary injunction. On June 24, 2024, this Court issued a preliminary injunction, enjoining Defendants "from any further forgiveness for borrowers under the Final Rule's SAVE plan."”
Source: United States District Court, Eastern District of Missouri, State of Missouri, et al. v. Trump, et al., No. 4:24-cv-520-JAR, Joint Motion for Entry of Final Judgment, Doc. 91 (filed December 9, 2025)
Why Was the SAVE Plan Forgiveness Lawsuit Filed?
The SAVE plan forgiveness lawsuit was filed because Republican-led states say the Education Department exceeded its authority by forgiving loans through a repayment rule, and borrowers later said the Department was withholding the forgiveness that rule promised. The states argued that SAVE effectively turned loans into grants "under the guise" of changing repayment terms, a power they say belongs to Congress.
Eleven states led by Kansas sued on March 28, 2024, and seven states led by Missouri sued on April 9, 2024. Some plaintiffs also argued that the rule cut state income tax revenue, because the American Rescue Plan made forgiven student debt tax-free only through the end of 2025. The Education Department under the Biden administration defended the plan as an exercise of authority Congress gave it in 1993 to create income-driven repayment plans.
Havens came from the other direction. Four borrowers sued on March 9, 2026, after the Missouri district court dismissed the states' case, and they allege that nothing legally barred the Department from applying SAVE anymore. The Department disputes that and argues in its filings that the Missouri court's judgment controls and that no SAVE rule remains for a D.C. court to enforce.
What Harms Does the SAVE Plan Forgiveness Lawsuit Allege?
The SAVE plan forgiveness lawsuit alleges four distinct harms, one raised by the states and three raised by borrowers. Each is defined in plain language first, followed by what the plaintiffs allege. The Department disputes the borrowers' allegations, and no court has ruled on them.
Delayed Loan Forgiveness
Loan forgiveness, also called discharge, is the cancellation of a remaining student loan balance after a borrower has made the required number of qualifying payments.
The Havens complaint alleges that the Department refuses to cancel loans for borrowers who already reached their payment thresholds. Heather Havens says she made 303 payments toward a 300-payment requirement on two loans, and Anna Grunseth says she made 105 of the 120 payments her balance requires. Business Insider reports that switching plans would move her discharge date to the month of enrollment, which could make the forgiveness taxable now that the American Rescue Plan exclusion has expired.
Higher Monthly Payments
A monthly payment under an income-driven plan is the amount a borrower owes each month, set as a share of income instead of a fixed schedule.
Protect Borrowers reports that SAVE would have cut most borrowers' payments roughly in half and that 4.6 million enrolled borrowers had a $0 payment. Borrowers who do not choose a new plan within 90 days of their servicer's notice are placed on a standard plan, which the Student Debt Crisis Center describes as typically the most expensive option. The Havens plaintiffs ask the court to move borrowers to REPAYE instead, a request the Department has not granted.
Interest Accrual During Forbearance
Forbearance is a temporary pause in required loan payments, during which interest may still be added to the balance.
Borrowers who were enrolled in SAVE were placed in a forbearance after the 2024 injunctions, and TISLA reports that the months do not count toward income-driven or Public Service Loan Forgiveness. The Institute of Student Loan Advisors, known as TISLA, reports that interest on the forbearance is not retroactive and that servicers should reverse any interest charged before August 1, 2025. The Missouri settlement did not restore those months.
Lost State Tax Revenue
State income tax revenue is the money a state collects from taxable income, and forgiven student debt can change how much income is taxable.
The Kansas-led states alleged that SAVE reduced their tax collections. Their complaint pointed to a Department statement that Kansas borrowers had already received nearly $10 million in relief, and it argued Kansas could not tax that amount as it could have for forgiveness granted in 2026 or later. Judge Ross rejected the Biden administration's effort to dismiss the Missouri case and found the states had standing.
What Is the Current Status of the SAVE Plan Forgiveness Lawsuit?
The current status of the SAVE plan forgiveness lawsuit is that the Missouri case ended in a March 2026 judgment vacating the SAVE rule after a brief February dismissal, while Havens v. U.S. Department of Education remains pending in the District of Columbia. No court has ordered the Education Department to forgive loans under SAVE, and no ruling in Havens had been located as of October 30, 2026.
State of Missouri et al. v. Trump et al., No. 4:24-cv-520-JAR (E.D. Mo.)
Judge John A. Ross issued a preliminary injunction on June 24, 2024, and the Eighth Circuit affirmed it on February 18, 2025, ordering the injunction widened to cover the entire SAVE rule. The Department and the states then settled, and the parties asked the court on December 9, 2025, to vacate the rule with one exception, a provision on forbearance months that was never challenged.
Judge Ross dismissed the case on February 27, 2026, finding no live dispute remained. The Eighth Circuit reversed that dismissal on March 9, 2026, and reporting by NASFAA and TISLA places the resulting judgment vacating the SAVE rule at March 10, 2026. The case is reported closed.
| Court | U.S. District Court for the Eastern District of Missouri |
| Case Number | 4:24-cv-00520-JAR |
| Judge | John A. Ross |
| Filed | April 9, 2024 |
| Plaintiffs | Missouri, Arkansas, Florida, Georgia, North Dakota, Ohio, Oklahoma |
| Defendants | U.S. Department of Education, Education Secretary Linda McMahon, President Donald Trump (official capacities) |
| Appeals | Eighth Circuit Nos. 24-2332 and 24-2351 |
| Outcome | SAVE Final Rule vacated except 34 C.F.R. § 685.209(k)(4)(iv), per the parties' proposed judgment and reporting on the March 2026 order |
Havens et al. v. U.S. Department of Education et al., No. 1:26-cv-00816 (D.D.C.)
Four borrowers filed the complaint on March 9, 2026, and amended it on June 24, 2026, after asking for a preliminary injunction on June 23. They seek an order that the Department cancel loans that meet SAVE's discharge requirements, restore REPAYE and halt the transfers out of SAVE. The Department moved to dismiss and argued that the Missouri court's judgment bars the case.
According to reporting by The College Investor, the Department's reply brief was filed on August 17, 2026, which closed the briefing. No hearing was reported as scheduled, and the judge can rule on the injunction and the motion to dismiss together.
| Court | U.S. District Court for the District of Columbia |
| Case Number | 1:26-cv-00816 |
| Judge | Loren L. AliKhan, per the case's docket listing |
| Filed | March 9, 2026 |
| Plaintiffs | Heather Havens, Elizabeth Robeson, Anna Grunseth, William Boykin |
| Defendants | U.S. Department of Education and Secretary Linda McMahon |
| Plaintiffs' Counsel | Angel E. Reyes, Power to the People Law PLLC |
| Relief Sought | Declarations, immediate discharge for eligible borrowers, resumed SAVE implementation, REPAYE restored |
| Status | Briefing closed August 17, 2026; no ruling located as of October 30, 2026 |
Has the SAVE Plan Forgiveness Lawsuit Settled?
Yes. The Education Department settled the Missouri SAVE plan lawsuit in a December 2025 agreement, but the settlement pays borrowers nothing and ended SAVE instead of expanding forgiveness.
No settlement fund, payout amount or claims process exists, because the case was not a class action. Forgiveness here means cancellation of a loan balance, not a cash payment, and Havens v. U.S. Department of Education, which seeks that cancellation, had not settled as of October 30, 2026.
TISLA summarizes the settlement as requiring SAVE borrowers to change plans, ending forgiveness under SAVE and REPAYE, keeping forgiveness under PSLF, ICR, PAYE and IBR, and requiring the Department to notify the Missouri Attorney General's office if it forgives $10 billion or more in any one month. TISLA labels parts of that summary its own interpretation.
Protect Borrowers called the settlement a capitulation that went further than the lawsuit or the Eighth Circuit required. Before the injunctions, the Department had identified nearly half a million borrowers eligible for about $5.5 billion in SAVE cancellation, according to the same group.
SAVE Plan Forgiveness Lawsuit Updates and Case Status
The latest SAVE plan forgiveness lawsuit updates, from the 2023 rule to the Havens briefing, are listed below. As of October 2026, the Missouri case has ended in a judgment vacating SAVE and Havens awaits a ruling. The full timeline below covers every confirmed development in order.
SAVE Plan Forgiveness Lawsuit Timeline of Events
Education Department Publishes the SAVE Final Rule
The Education Department published the Improving Income Driven Repayment final rule at 88 Fed. Reg. 43,820 on July 10, 2023, creating the SAVE plan. Protect Borrowers reports that the plan became available to borrowers in August 2023.
Eleven States Led by Kansas Sue Over SAVE
Alabama, Alaska, Idaho, Iowa, Kansas, Louisiana, Montana, Nebraska, South Carolina, Texas and Utah sued the Education Department in federal court in Kansas on March 28, 2024. Higher Ed Dive reported that the states argued SAVE exceeded the Department's authority and cut state tax revenue.
Seven States Led by Missouri File Missouri v. Biden
Missouri, Arkansas, Florida, Georgia, North Dakota, Ohio and Oklahoma filed the complaint in the Eastern District of Missouri on April 9, 2024, challenging portions of the SAVE rule and soon moving for a preliminary injunction.
Two Federal Judges Block Parts of SAVE on the Same Day
Judge John A. Ross in Missouri enjoined any further forgiveness under SAVE on June 24, 2024, while Judge Daniel D. Crabtree in Kansas blocked provisions that had not yet taken effect. Crabtree's order also removed eight of the 11 Kansas-case states for lack of standing, according to Investopedia.
Eighth Circuit Bars Forgiveness, Interest Relief and Payment Thresholds Pending Appeal
A motions panel of the Eighth Circuit enjoined further forgiveness, the waiver of accrued interest and the implementation of SAVE's payment-threshold provisions on August 9, 2024, in Missouri v. Biden, 112 F.4th 531. The court had temporarily blocked the plan on July 18, according to Investopedia.
Eighth Circuit Affirms the Injunction and Orders It Widened
A three-judge Eighth Circuit panel of Judges Gruender, Erickson and Grasz affirmed the Missouri preliminary injunction on February 18, 2025, and remanded with instructions to enjoin the entire SAVE rule and a related hybrid rule. The court held the states were likely to succeed in challenging SAVE's forgiveness provision.
District Court Enters the Eighth Circuit's Mandate
The Eastern District of Missouri entered an order implementing the Eighth Circuit's mandate on April 14, 2025, according to the parties' later joint motion. The Department did not seek further appellate review of the Eighth Circuit's opinion.
Education Department and Missouri File a Settlement and Joint Motion for Final Judgment
The Education Department and the seven plaintiff states filed a joint motion on December 9, 2025, asking the Eastern District of Missouri to vacate the SAVE Final Rule except for one forbearance provision and close the case. The Department's footnote reserved its position that the Administrative Procedure Act does not authorize courts to vacate agency rules.
Judge Ross Dismisses Missouri v. Trump as Moot
Judge John A. Ross dismissed Missouri v. Trump on February 27, 2026, finding no live case or controversy remained after the Department stopped defending the rule. The Havens complaint later cited that dismissal as lifting the only legal barrier to SAVE benefits.
Eighth Circuit Reverses the Dismissal as Borrowers File Havens
The Eighth Circuit reversed Judge Ross's dismissal on March 9, 2026, and directed entry of final judgment on the settlement, according to NASFAA. The same day, four borrowers filed Havens v. U.S. Department of Education in the District of Columbia, seeking immediate loan discharge under SAVE.
SAVE Final Rule Is Reported Vacated
TISLA and NASFAA report that a judgment vacating the SAVE Final Rule, except the forbearance-credit provision, followed the Eighth Circuit's reversal, with TISLA dating the judgment March 10, 2026. This page has not read the order itself.
Havens Plaintiffs File an Amended Complaint and Seek an Injunction
The Havens plaintiffs filed an amended complaint on June 24, 2026, after moving for a preliminary injunction on June 23. They asked the court to keep borrowers in REPAYE, halt the Department's planned July transfers out of SAVE and order immediate forgiveness for borrowers past their payment thresholds.
Education Department Begins Sending 90-Day Plan Notices to SAVE Borrowers
The Education Department began sending notices on July 1, 2026, telling borrowers in the SAVE forbearance they have 90 days to choose a new repayment plan or be placed on a standard plan, according to The College Investor and TISLA. TISLA says the new Repayment Assistance Plan was scheduled to become available the same day.
Briefing Closes on the Havens Injunction and Motion to Dismiss
The Department filed its reply brief on August 17, 2026, closing the briefing on the Havens plaintiffs' injunction request and the Department's motion to dismiss, as reported by The College Investor. No ruling had been located as of October 30, 2026.
First 90-Day Windows Close for SAVE Borrowers
A borrower notified on July 1, 2026, had until September 29, 2026, to choose a new plan, and the Department told the Havens court that was the earliest date it could force a move. Each borrower's own clock runs from the date of their servicer notice.
Department Guidance Reportedly Adds a Final 30-Day Notice
The College Investor reports that the Department's SAVE guidance was updated in October 2026 to say borrowers who miss the 90-day deadline receive a final 30-day notice before a servicer moves them to a fixed plan. This page has not confirmed the wording on the Department's own site.
What Did the Education Department Do in the SAVE Plan Forgiveness Lawsuit?
The Education Department defended SAVE until early 2025, then stopped fighting the states. Under Education Secretary Miguel Cardona, it said it had used its Higher Education Act authority three times in 30 years to create income-driven plans. After the Eighth Circuit's February 2025 opinion, the Department did not seek further review, and in December 2025 it joined Missouri's request to vacate the rule.
In Havens, the Department argues that a D.C. court cannot override the Missouri judgment and that no SAVE rule remains to enforce. It also reserved a broader position that courts cannot vacate agency rules under the Administrative Procedure Act. The table below lists each party and its reported role.
| Party | Role | Reported Position |
|---|---|---|
| U.S. Department of Education | Defendant in Missouri v. Trump and Havens | Settled the Missouri case; opposes the Havens injunction and asks for dismissal |
| Linda McMahon, Education Secretary | Official-capacity defendant in both cases | Named in the joint motion for final judgment as a settling defendant |
| Seven Missouri-led states | Plaintiffs in Missouri v. Trump | Won vacatur of the SAVE rule; settlement requires notice if $10 billion or more is forgiven in a month, per TISLA |
| Four Havens borrowers | Plaintiffs in Havens | Allege the Department is unlawfully withholding SAVE benefits |
These are positions taken in filings and public statements, and no court has decided the Havens claims.
How Does the SAVE Plan Forgiveness Lawsuit Compare to Related Cases?
Two other matters share the SAVE name or the forgiveness question without being part of this case. Kansas v. Biden was the earlier 11-state challenge, and Biden v. Nebraska was a 2023 Supreme Court case over a different forgiveness program.
| Matter | Subject | Relationship to This Case | Reported Status |
|---|---|---|---|
| Kansas v. Biden (D. Kan.) | 11 states challenged SAVE, filed March 28, 2024 | Parallel challenge to the same rule before Judge Crabtree | Preliminary injunction on June 24, 2024; later posture not confirmed here |
| Biden v. Nebraska (U.S. Supreme Court, No. 22-535) | One-time cancellation of up to $20,000 under the HEROES Act | Separate program, decided on different statutory authority | Supreme Court struck the program down in June 2023 |
The Missouri case described above is the one that ended SAVE. Neither related matter changes the status of Havens.
Frequently Asked Questions
What is the SAVE plan forgiveness lawsuit about?
The SAVE plan forgiveness lawsuit is about whether the Education Department had legal authority to forgive student loans through the SAVE repayment plan and, in the Havens case, whether borrowers who reached their payment thresholds must still receive that forgiveness. The states won a judgment vacating the SAVE rule, and the Havens plaintiffs dispute that borrowers lost their rights.
Is the SAVE plan forgiveness lawsuit a class action?
No, the SAVE plan forgiveness lawsuit is not a class action. Missouri v. Trump was brought by seven states, and Havens has four named borrowers, so no claim form or settlement fund exists, and only a qualified attorney can say whether an individual has a separate claim.
Was the SAVE plan lawsuit dismissed?
The SAVE plan lawsuit in Missouri was dismissed on February 27, 2026, but the Eighth Circuit reversed that dismissal on March 9, 2026, and the SAVE rule was reported vacated in a judgment dated March 10. Havens v. U.S. Department of Education was not dismissed as of October 30, 2026, and the Department's motion to dismiss was awaiting a ruling.
Has the SAVE plan forgiveness lawsuit settled?
Yes, in part. The Education Department settled the Missouri case in December 2025, but the agreement pays borrowers nothing and ended SAVE, while Havens had not settled as of October 30, 2026.
What happens to borrowers in the SAVE plan after the lawsuit?
Borrowers in the SAVE plan after the lawsuit receive a notice from their servicer giving them 90 days to choose a new repayment plan, and those who do not choose are moved to a standard plan. Notices began on July 1, 2026, each borrower's deadline depends on their own notice date, and TISLA says the Repayment Assistance Plan was scheduled to become available the same day.
Can the Havens lawsuit restore the SAVE plan?
The Havens lawsuit asks a federal court to restore REPAYE and order forgiveness, but no court had granted that relief as of October 30, 2026. The Department argues the Missouri judgment prevents it.