WASHINGTON – It's official: Former President Joe Biden's signature student loan repayment plan is over. And the clock is ticking for millions of borrowers to enroll in another program.

On Dec. 9, the federal Education Department announced a proposed legal agreement meant to kill the program known as the Saving on a Valuable Education, or SAVE, plan. The agency said it settled with several red states who sued to stop SAVE in March 2024.

If approved by the courts, the settlement will require that no new borrowers are enrolled in the SAVE program, which based monthly bills on borrowers' incomes and was hailed by the Biden administration as the most affordable student loan repayment option in history. The department will also deny any pending SAVE applications and move current borrowers into different repayment plans.

The settlement, a death knell for one of Biden's main education policy achievements, puts an end to the legal limbo in which more than 7 million SAVE borrowers have been stuck for more than a year and a half. Those borrowers have been in administrative forbearance, not requiring them to make payments, since June of last year. Interest on their debt restarted this August.

The agreement also represents what the Trump administration called the "final nail in the coffin" to Biden's efforts to deliver nearly $200 billion in student loan relief to over 5 million Americans with crushing debt. Through the SAVE program specifically, President Donald Trump's predecessor greenlit roughly $5.5 billion in student loan discharges to nearly half a million SAVE borrowers. SAVE also brought many borrowers' monthly payments down to $0.

In a statement, Nicholas Kent, the education under secretary, criticized the debt cancellation made possible by Biden as an attempt to gain a "political win to prop up a failing administration."

“The Trump administration is righting this wrong and bringing an end to this deceptive scheme," he said. "The law is clear: If you take out a loan, you must pay it back."

Protect Borrowers, an advocacy group for people with student debt, called the settlement a "back-room deal" that amounted to "pure capitulation."

"The real story here is the unrelenting, right-wing push to jack up costs on working people with student debt," Persis Yu, the organization's deputy executive director, said in a statement.

The Education Department said SAVE borrowers will have a "limited time" to select a new repayment plan, but they can transition to other income-based programs. The agency encouraged impacted Americans to estimate their new monthly payments using tools on the Federal Student Aid website.

Zachary Schermele is a congressional reporter for USA TODAY. You can reach him by email at zschermele@usatoday.com. Follow him on X at @ZachSchermele and Bluesky at @zachschermele.bsky.social.

This article originally appeared on USA TODAY: Education Dept. officially kills Biden-era student loan repayment plan

Reporting by Zachary Schermele, USA TODAY / USA TODAY

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