Federal Appeals Court Reverses SAVE Dismissal, Advancing ED and Missouri’s Settlement
By Maria Carrasco, NASFAA Staff Reporter
Just over a week after a district court dismissed a lawsuit and proposed settlement between the Department of Education (ED) and Missouri regarding the Saving on a Valuable Education (SAVE) plan, a federal appeals court on Monday reversed the dismissal, leaving many questions for millions of borrowers on where they stand in the repayment plan.
In late February, Judge John Ross of the U.S. District Court for the Eastern District of Missouri dismissed a settlement between ED and Missouri, arguing that there is “no longer a live case or controversy sufficient,” therefore, the court doesn’t have authority to enter a judgment. Under the proposed settlement, ED agreed not to enroll any new borrowers in SAVE, to deny pending applications, and to move all 7 million program borrowers into other repayment plans.
In response to this dismissal, Missouri, representing a group of GOP states, filed a new motion a few days later, requesting to temporarily halt Ross’s dismissal order while they pursue an appeal. Ross responded to this motion and doubled down on the dismissal, stating that “there is no such remaining adversity” between ED and Missouri. Continuing to litigate would also put the court in the “impermissible and undesirable position of adjudicating a hypothetical question posed in ‘a friendly, non-adversary, proceeding’ in which a ‘real, earnest and vital controversy’ has ceased to exist and which the parties have resolved out of court,” Ross wrote.
However, on Monday, a three-judge panel for the Eighth Circuit Court of Appeals reversed Ross’s dismissal, directing the district court to enter a final judgment on ED and Missouri’s settlement.
In a statement to NASFAA, ED said it will issue guidance in the “coming weeks” on next steps for borrowers enrolled in the SAVE plan, including information on how to move to another repayment plan.
This order from the Eighth Circuit Court of Appeals comes as a group of borrowers has filed a separate lawsuit in response to Ross’s dismissal of ED’s settlement, requesting that the department fully implement the SAVE repayment plan, provide loan discharge to borrowers currently eligible under the program, and restore access to SAVE repayment benefits for borrowers denied relief.
Many questions remain for the 7 million borrowers enrolled in SAVE, including whether they are still in forbearance, how and when they’ll be transitioned to a new repayment plan, whether they’ll receive debt relief benefits under SAVE, and more.
Under the One Big Beautiful Bill Act (OBBBA), the SAVE repayment plan will be eliminated as of July 1, 2028. ED has yet to announce its plan to sunset the SAVE plan, but has stated that it will hold a negotiated rulemaking session to remove the plan from federal regulations. ED has yet to release any details on this session.
Stay tuned to Today’s News for more updates on the SAVE plan.
Publication Date: 3/11/2026
You must be logged in to comment on this page.