The Trump administration has officially dismantled the Biden-era SAVE student loan forgiveness plan, signaling a decisive shift toward fiscal responsibility and legal accountability.

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The Department of Education has stopped processing all SAVE applications, effectively denying access to 460,000 federal student loan borrowers who sought reduced payments through the now-defunct program.

The SAVE plan—short for Saving on a Valuable Education—was introduced by the Biden administration to cap student loan payments at 5–10% of a borrower’s discretionary income. While it was promoted as a relief effort for low- and middle-income earners, critics warned of its astronomical long-term cost and shaky legal foundation. In 2024, a federal court affirmed those concerns, ruling that the plan overstepped executive authority.

President Trump’s One Big Beautiful Bill, signed into law on July 4, 2025, replaces SAVE and other complex income-driven repayment (IDR) programs with a simplified, two-option system: a standard 10-year repayment plan and a new Repayment Assistance Plan (RAP). RAP allows borrowers to pay between 1–10% of their income over 30 years, striking a balance between support and personal responsibility. The bill also imposes strict annual and lifetime caps on Graduate and Parent PLUS loans, limiting overall borrowing to $65,000 and reining in the cycle of endless student debt.

This reform aligns with a broader conservative push for discipline in federal spending and accountability in higher education financing. By ending unsustainable handouts and restoring clear repayment structures, the Trump administration aims to protect taxpayers while helping borrowers repay their debts responsibly.

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(Excerpt from Town Hall. Photo by Andrew Harnik/Getty Images)