On February 13, 2025, Linda McMahon, nominated by President Donald Trump to serve as Secretary of Education, testified during her Senate confirmation hearing. The backdrop of this hearing coincided with the Trump administration's announcement of a proposed joint settlement with Missouri that could significantly impact millions of student loan borrowers currently in a Biden-era forbearance program known as the Saving on a Valuable Education (SAVE) plan.
The U.S. Department of Education indicated that borrowers who remain enrolled in the SAVE forbearance would soon need to choose a new repayment option. This shift comes in light of a ruling from the 8th U.S. Circuit Court of Appeals, which sided with Republican-led states that challenged the Biden administration's authority to implement the SAVE plan. As of July 2025, more than 7.6 million borrowers were identified as being in this forbearance.
The proposed settlement aims to dismiss ongoing litigation regarding the SAVE plan in exchange for an agreement that would prevent the enrollment of new borrowers into the program and transition current participants into legal repayment plans. Higher education expert Mark Kantrowitz suggested that this could result in borrowers needing to exit the SAVE forbearance sooner than anticipated, possibly by early next year.
This legal development follows a broader context where consumer advocates have criticized the agreement, claiming it would eliminate an affordable repayment option for borrowers. The SAVE plan, which allows for lower monthly payments and more rapid debt forgiveness for those with smaller balances, has been a significant point of contention since the Supreme Court blocked President Biden's earlier debt cancellation efforts in June 2023. Currently, student loan debt in the United States exceeds $1.6 trillion, affecting over 42 million borrowers.