On February 18, 2025, the Eighth Circuit Court of Appeals ruled that the Biden administration’s income-driven repayment Plan was an overreach of authority. In doing so, it upheld a preliminary injunction on the Plan and sent the cases back to the district courts. As a result, the U.S. Department of Education (ED) is currently prohibited from using the SAVE formula to calculate monthly payments and from forgiving loans after years of payments under the SAVE, Pay As You Earn (PAYE), and Income-Contingent Repayment (ICR) Plans.

The SAVE Plan was implemented to lower monthly payments and eliminate high interest payments and also offered full forgiveness after meeting certain qualifications. However, it also phased out new enrollments in the older income-driven repayment plans – PAYE and ICR. 

In its decision, the Eighth Circuit said it was "hard-pressed" to find that Congress would approve a repayment plan that would wipe out borrowers' balances after as few as 10 years of payments. The ruling also suggested that other student-loan repayment plans, including income-contingent repayment, were not permissible under the Higher Education Act. In the meantime, while this remains blocked, approximately eight million borrowers are in limbo as it is unclear when borrowers will be taken out of forbearance status and expected to resume payments. 

However, late on Friday, February 21, 2025, the Trump administration unexpectedly took down the online application form for several popular student debt repayment plans. In response to the Eighth Circuit Court of Appeals decision, ED officials quietly removed the application portal for both loan consolidations and income-driven repayment plans, which cap what borrowers must pay each month at a percent of their earnings. As a result, the Trump administration appears to be closing off access to repayment options that were not at issue in the litigation. The result is that borrowers who were already enrolled in income-driven plans are unable to submit their annual paperwork certifying their incomes. It remains unclear whether the form was removed to make changes or whether it will continue this way for an extended period of time. Doing so would effectively block borrowers from enrolling. 

Unfortunately, the ED guidance was last updated on January 17, 2025, which was prior to the Eighth Circuit’s decision. It still indicates that borrowers enrolled in The SAVE Plan would not be expected to make payments until December "at the earliest." The guidance also provides that borrowers who are in general forbearance status will continue to be in forbearance until servicers are able to accurately calculate monthly payments. ED expects servicers to be able to do this no earlier than September 2025. However, if borrowers were enrolled in the Income-Based Repayment (IBR) Plan, their loans can still be forgiven, as the IBR was separately enacted by Congress. The site continues to advise borrowers that they will have the opportunity to make another choice for repayment. Payments made on PAYE, SAVE, and ICR are counted toward IBR Plan forgiveness if the borrower enrolls in the IBR Plan. During the Biden administration, ED provided approximately $175 billion in student loan forgiveness for around five million individuals. The Trump administration has opposed most efforts for similar programs.