The SAVE Plan is, for now, dead. On February 18, 2025, the U.S. Court of Appeals for the Eighth Circuit affirmed and broadened a preliminary injunction against the Biden-era “Saving on a Valuable Education” student loan repayment plan in Missouri v. Trump, U.S. Department of Education, Nos. 24-2332 & 24-2351. The case is now defended by President Donald J. Trump’s administration and the U.S. Department of Education in their official capacities.
Seven states, including Florida, argued that the Department exceeded its statutory authority by using income-contingent repayment regulations to grant sweeping loan forgiveness rather than to ensure that loans are repaid over time. The Eighth Circuit agreed, and directed that the entire SAVE Plan rule be enjoined nationwide while the case proceeds.
The court held that 20 U.S.C. § 1087e(d)(1)(D) authorizes the Secretary of Education to design plans for the repayment of federal student loans — not for their cancellation. Because the SAVE Plan’s forgiveness provisions could not be severed from the rest of the rule, and because the Department tried to revive older REPAYE forgiveness terms as a workaround, the injunction reaches the whole rule and the hybrid workaround with it.
This ruling significantly curtails the Executive Branch’s ability to use income-driven repayment rules as a vehicle for mass student-loan forgiveness without clear authorization from Congress.
Case Brief: Missouri v. Trump (8th Cir. Feb. 18, 2025)
(a) Facts: SAVE Plan Background and Procedural History
Parties. Plaintiffs are seven states — Missouri, Arkansas, Florida, Georgia, North Dakota, Ohio, and Oklahoma. Defendants are President Donald J. Trump, the U.S. Department of Education, and Acting Secretary of Education Denise L. Carter, in their official capacities, substituted for their predecessors after the change in administration.
What happened. In July 2023 the Department promulgated the SAVE Plan, an income-contingent repayment (ICR) plan issued under 20 U.S.C. § 1087e(d)(1)(D). The rule reduced monthly payments for many borrowers to as little as $0, halted the accrual of unpaid interest, and cancelled any remaining balance after as few as ten years of payments.
The states sued in the Eastern District of Missouri, contending that the Secretary has no statutory authority to forgive ICR balances. Missouri’s asserted injury ran through the Higher Education Loan Authority of the State of Missouri (MOHELA), which lost serviced accounts and the servicing fees attached to them.
Procedural history. The district court preliminarily enjoined the SAVE Plan’s forgiveness provisions but left its payment-calculation provisions in force. The Department then revived the forgiveness provisions of the 2015 REPAYE Rule — a “hybrid” of enjoined payment terms and older REPAYE cancellation — and the district court declined to clarify that its injunction reached that workaround.
Both sides cross-appealed: the federal officials sought to narrow or vacate the injunction; the states sought to broaden it. The Eighth Circuit had already entered an injunction pending appeal in August 2024.
Judgment. The Eighth Circuit affirmed the entry of the preliminary injunction and remanded with instructions to modify it to enjoin the SAVE Plan in its entirety — including the resurrected REPAYE forgiveness provisions — nationwide, pending final judgment. Panel: Gruender, Erickson, and Grasz, Circuit Judges (Grasz, J., writing).
(b) Issues on Appeal
1. Standing. Whether Missouri established Article III standing through financial harm to MOHELA, a state instrumentality, where the Department argued that offsetting benefits and MOHELA’s own account-transfer request negated any injury.
2. Statutory authority (likelihood of success). Whether § 1087e(d)(1)(D), which authorizes ICR plans with “varying annual repayment amounts based on the income of the borrower, paid over an extended period of time prescribed by the Secretary, not to exceed 25 years,” permits the Secretary to cancel a borrower’s remaining balance at the end of that period.
3. Severability. Whether the forgiveness provisions can be severed from the rest of the rule, leaving the reduced-payment provisions operative.
4. Scope of relief. Whether the injunction should extend to the entire SAVE Plan and to the Department’s revived REPAYE forgiveness provisions, and whether it should apply nationwide rather than only to MOHELA-serviced loans.
(c) Holding: The SAVE Plan Exceeded the Secretary’s Authority
Missouri has standing. Forgiveness of MOHELA-serviced loans causes a concrete loss of servicing revenue, and the standing inquiry “is not an accounting exercise” in which alleged offsetting benefits cancel out a cognizable injury.
On the merits, the states are likely to succeed. Section 1087e(d)(1)(D) authorizes the Secretary to set the terms of repayment for an ICR plan; it does not authorize loan forgiveness. Income contingency governs how much a borrower pays each year, not whether the borrower ultimately remains liable for the debt.
Where Congress intended cancellation, it said so expressly — as in the income-based repayment (IBR) provision directing that the Secretary “shall repay or cancel any outstanding balance” — and it included no comparable language for ICR.
The forgiveness provisions are not severable from the balance of the rule. And because the Department attempted to achieve the same result by reinstating REPAYE’s forgiveness terms, special circumstances justify enjoining the entire SAVE Plan, and the hybrid workaround with it, on a nationwide basis.
(d) Rationale
Text and structure. Every repayment plan Congress authorized — standard, extended, graduated, and income-contingent — is designed to result in full repayment by the close of its payment period. The statute defines the ICR balance as “the unpaid principal amount of the loan, any accrued interest, and any fees.” Reading a cancellation power into the ICR provision would convert a repayment mechanism into a forgiveness program that the text does not describe.
Congressional silence contrasted with express authority. The IBR statute expressly directs cancellation of outstanding balances. The absence of parallel language in the ICR provision is a deliberate choice, not an oversight, and the Secretary cannot supply by regulation what Congress withheld.
Income contingency misread. The Department’s position conflated the amount of an annual payment with the existence of the obligation. As the court put it, the amount paid each year depends on the borrower’s income, but the borrower’s ultimate liability is still to repay the loan.
Major questions. Following Biden v. Nebraska, the court found that the SAVE Plan carries economic and political significance at least as great as the HEROES Act forgiveness program the Supreme Court rejected. A program of that magnitude requires clear congressional authorization, and none exists here.
Severability and scope. Without forgiveness, borrowers paying reduced or $0 monthly amounts would never retire principal and would default en masse at the end of the payment period — an outcome the rule itself was drafted to avoid. The Secretary never argued that the remaining provisions could function on their own.
Limiting the injunction to MOHELA-serviced loans would be unworkable to administer, and the Department’s mid-litigation revival of REPAYE forgiveness confirmed that narrower relief would not hold.
Equities. Forgiveness, once granted, is practically irreversible, and the servicing revenue lost in the interim is unrecoverable against the federal government. The balance of harms and the public interest therefore favor preserving the status quo while the merits are litigated.
What the SAVE Plan Injunction Means for Florida Borrowers
Enrollment is not repayment credit. Borrowers parked in the SAVE Plan forbearance are not accruing qualifying payments toward cancellation under this rule. Anyone counting on a ten- or twenty-year forgiveness date should confirm, in writing with the servicer, which months actually count.
Other forgiveness tracks survive. The decision addresses ICR authority. Statutory programs that Congress authorized expressly — income-based repayment and Public Service Loan Forgiveness among them — rest on different provisions and were not struck down.
Document everything. Servicer transfers, recalculated payment amounts, and interest-accrual changes during the injunction period are the facts that later disputes turn on. Keep statements and correspondence.
Watch the merits. This is preliminary relief, not a final judgment. The SAVE Plan’s fate on remand, and any further review, will decide whether the reasoning above becomes settled law.
Download the Full Opinion: Missouri v. Trump, No. 24-2332 (8th Cir. Feb. 18, 2025) (PDF)
Cox Law, PLLC monitors federal and state case law developments that may affect Florida borrowers, students, and creditors. If you have questions about how recent court decisions may impact your legal rights, reach out today for a consultation. Call (813) 685-8600 or email Webquestion@Coxlawplc.com.
Cox Law, PLLC · Florida Civil Litigation Attorneys
Student Loan Terms Changed Under You?
The SAVE Plan injunction reshaped what counts as repayment, what qualifies for forgiveness, and what a servicer may collect while the case is on remand. Cox Law, PLLC reads the order, checks the numbers against your account history, and tells you where you actually stand — on servicer disputes, collection demands, and the paperwork that later claims turn on. If a payment count, a balance, or a notice does not look right, let’s talk.
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Disclaimer: The information in this post is for general informational purposes only and does not constitute legal advice. Reading this post does not create an attorney–client relationship. Every case is different; you should consult an attorney about your specific situation.