United States president Donald Trump signed his grand legislative agenda, which he dubbed the “Big Beautiful Bill”, on July 4 of this year.
This major legislation is one of the most controversial bills in modern American history, with Trump’s critics providing sharp pushback to the bill’s cuts to social safety programs. Another aspect of the bill that’s proving to be controversial is its revamping of student loan repayment. Student loans are among the highest causes of debt in the United States today, especially among young people.
Trump’s bill seeks to phase out Biden-era options for student loan repayment, because of which the Department of Education has just denied 460,000 students the SAVE payment plan, which was originally instituted under former President Joe Biden.
A department of education spokesperson had this to say in a statement to Politico: “Loan servicers cannot process these applications as SAVE is no longer an option, as it is illegal.”
Donald Trump dismantles Biden’s SAVE plan
The SAVE plan, instituted under Joe Biden’s administration, was the lowest-cost monthly payment plan available for student borrowers, with it capping payments at 5% of an undergraduate student’s discretionary income, and 10% for a graduate student’s discretionary income. Prior to Donald Trump’s legislation removing the plan entirely, its implementation had been blocked in the courts since June 2024.
To replace the dismantled SAVE plan and other Biden-era options on the chopping block, the current Department of Education plans to introduce two new payment plans. Donald Trump’s administration has claimed that the SAVE program was a burden on taxpayers and that a more streamlined student loan payment process was needed.
Students may not have known they were opting for SAVE
Complicating the situation for the disenfranchised students is the possibility that they may not have even known they were opting in to Joe Biden’s SAVE program.
Scott Buchanan of the Student Loan Servicing Alliance argued that students may have unwittingly signed on to the SAVE program simply by picking the lowest monthly payment option available to them. He proceeded to recommend that students start fresh and reapply to a different payment plan entirely.