Amended SAVE Plan Lawsuit Claims ED Engaged in “Shadow Repeal” of REPAYE Plan
By Hugh T. Ferguson, NASFAA Managing Editor
An ongoing legal challenge to the Department of Education’s (ED) wind-down of the Saving on a Valuable Education (SAVE) repayment plan was recently amended, with plaintiffs, made up of four individuals, arguing that the department’s actions to sunset the SAVE plan’s precursor, Revised Pay As You Earn (REPAYE), violates the Administrative Procedure Act (APA).
Plaintiffs argue that, because the SAVE plan regulations adopted in 2023 amended the REPAYE regulations, the federal court’s vacatur, or nullification, of the SAVE plan in March restored the REPAYE regulations that were in place prior to the creation of SAVE.
Borrowers currently enrolled in SAVE, then, should not have to transition out of that plan as ED currently requires. Instead, their repayment terms should revert to REPAYE terms, similar to how borrowers enrolled in REPAYE had their monthly payments automatically recalculated when SAVE took effect. To repeal REPAYE, the plaintiffs argue, ED would have to engage in negotiated rulemaking under the APA.
By failing to revert to the REPAYE terms following the SAVE vacatur and instead requiring borrowers to transition to other repayment plans, plaintiffs allege that ED has engaged in a “shadow repeal” of REPAYE, effectively eliminating that program, even though the court only ended SAVE.
Since ED began sending communications to SAVE borrowers in July with a 90-day deadline to enroll in a new plan, the plaintiffs are requesting a preliminary injunction and stay to postpone that deadline while the court considers the case.
Plaintiffs are also arguing that ED should forgive balances for borrowers enrolled in SAVE who met the criteria for cancellation prior to the SAVE vacatur, and identify and accept payments from borrowers for the months of involuntary forbearance prior to the SAVE vacatur that they are entitled to buy back.
ED has asked for the lawsuit to be dismissed. If dismissed, borrowers would need to select a new eligible repayment plan or be automatically enrolled in a standard repayment plan. If the plaintiffs succeed, they seek immediate forgiveness for borrowers who have already reached the SAVE plan’s forgiveness threshold. They are also requesting that ED reinstate REPAYE and automatically switch SAVE plan borrowers to REPAYE. It is unclear if SAVE borrowers who have already voluntarily changed plans would have REPAYE available to them as well if the plaintiffs are successful.
As a reminder, the One Big Beautiful Bill Act (OBBBA) sunsets the Income Contingent Repayment (ICR), PAYE, SAVE, and REPAYE plans as of July 1, 2028, so even if the court rules in the plaintiffs’ favor, borrowers in those plans will still be forced to choose a new plan sometime in the next two years.
This is an ongoing legal challenge. Stay tuned to Today’s News for more developments and implications for SAVE borrowers' repayment options.
Publication Date: 7/28/2026
Anthony S | 7/28/2026 11:14:08 AM
Don't worry, Data Centers and A.I. will SAVE us. (-_-)
You must be logged in to comment on this page.