Major Updates With the SAVE LAWSUIT
March 11th, 2026 Update:
If you’re reading this, I probably don’t need to recap the two-year legal battle over the SAVE plan. We’ve covered it extensively. In our last update, we shared that the plaintiffs and the defendants (who were essentially aligned at that point) had agreed to a settlement to wind down SAVE. The expectation was that the court would approve that settlement and provide a structured off-ramp. That didn’t happen. Instead, we’ve seen four major events in the case, with a fifth still imminent.
- At the end of February, the lower court dismissed the case as moot instead of accepting the settlement proposed by both sides back in December. The judge reasoned that there was no longer an active dispute between the parties, so there was nothing for the court to decide. This created a very interesting dynamic with nothing formally preventing SAVE from operating, but also knowing SAVE was ultimately dead now that it was back in DOE’s hands.
- The first week of March, DOE filed a petition with another court to re-open the other SAVE case from two years ago and put another injunction in place. They also petitioned the appellate court to step back in on the primary case.
- Meanwhile, a group of four borrowers also filed a suit to reinstate SAVE and force DOE to process applicable forgiveness owed to certain borrowers.
- Finally, the 8th Circuit appellate court did decide to step back in on March 9th. They overruled the lower court’s dismissal of SAVE, instead telling it (again) to expend their original ruling…basically deeming the entire plan unlawful.
This reminds me of one of those awkward times when your boss’ boss comes in and overrides a bad decision. That’s basically what just happened to Judge John Ross of the lower court. The 8th Circuit Appellate essentially said “We specifically told you back in April to expand your ruling (and shut down this program), not dismiss the case as moot. Now do what we say!”
So what comes next? We expect the lower court to accept the settlement terms proposed by both the states and the DOE back in December. From there, DOE will start publishing instructions, letting everyone know when and how to transition out of the SAVE plan.
And what is our advice to you? At this point, I would stay put. There will obviously be a flood of applications being submitted in the coming weeks and months. But there is also a strong chance DOE will automatically switch some borrowers to another IDR plan without requiring them to update the income information. If so, this would lead to significantly lower payment for many borrowers. So, hold for now, stay informed, and possibly consider filing an extension for 2025 taxes if you experienced a significant rise in income.
Things should move quickly from here. So stay tuned!
March 12th, 2026 Update:
As expected, the court quickly accepted the proposed settlement from December. So that’s a wrap! DOE now has full authority to start winding down the SAVE plan. We expect they will provide instructions very soon.
Brandon Barfield is the President and Co-Founder of Student Loan Professor, and is nationally known as student loan expert for graduate health professions. Since 2011, Brandon has given hundreds of loan repayment presentations for schools, hospitals, and medical conferences across the country. With his diverse background in financial aid, financial planning and student loan advisory, Brandon has a broad understanding of the intricacies surrounding student loans, loan repayment strategies, and how they should be considered when graduates make other financial decisions.
