Update – December 2025: A proposed settlement, pending court approval, is set to end the SAVE Plan due to ongoing litigation. The SAVE Plan is not available for new enrollments, and borrowers should review alternative repayment options under current IDR plans.
The SAVE Plan was supposed to be a game-changer — especially for high-income borrowers chasing forgiveness. But thanks to ongoing SAVE plan litigation, everything is up in the air. In early 2025, federal courts issued injunctions that halted key benefits, leaving millions of borrowers stuck in limbo.
Right now, the Department of Education can’t move forward with SAVE. New enrollments are blocked. Forgiveness under most income-driven repayment (IDR) plans is paused unless you’re on IBR. Even PSLF progress is stalled if you’re caught in SAVE-related forbearance. The legal uncertainty is creating real-world chaos — and if you’re not careful, it could cost you serious time, money, and forgiveness credit.
This guide breaks down what you need to know about SAVE plan litigation, what’s still possible under the current rules, and how to pivot your strategy without waiting on the courts or Congress. If you’re weighing IBR, PAYE, or PSLF — or just want to know what happens next — you’re in the right place.
Where the SAVE Plan Stands After the Court Injunctions
On February 18, 2025, two federal courts issued rulings blocking key provisions of the SAVE Plan and pausing forgiveness under other IDR plans not authorized by Congress. As a result:
- The Department of Education cannot continue implementing the SAVE Plan.
- Borrowers already on SAVE have been moved into 0% interest administrative forbearance.
- No new borrowers can enroll in SAVE.
- Forgiveness under SAVE, PAYE, and ICR is paused unless authorized by statute.
- Only IBR is currently eligible for IDR-based forgiveness.
If you were relying on SAVE’s lower payments and faster forgiveness, this is a major setback.
Can You Still Apply for SAVE or Other IDR Plans?
As of March 26, 2025, the online IDR application has reopened, but only for IBR, PAYE, and ICR. SAVE remains suspended indefinitely due to the court injunctions.
If you’re already enrolled in PAYE or ICR, you can stay there — but forgiveness under those plans is paused. Only IBR remains eligible for forgiveness right now. That’s a critical detail when making enrollment or recertification decisions.
Is PAYE Worth It After the SAVE Plan Freeze?
PAYE has reopened for new enrollments and is available until July 1, 2027. However, payments made on PAYE, SAVE, or ICR do not currently count toward forgiveness unless the borrower enrolls in IBR.
In other words: PAYE may still offer lower monthly payments for some borrowers, but if you’re counting on forgiveness, you’ll need to switch to IBR to earn credit.
Can Filing Taxes Separately Still Lower Your IDR Payments?
The old strategy of filing separately to exclude spousal income still exists — but the rules have changed.
While the broader IDR regulations took effect on July 1, 2024, the specific change to automatically exclude a spouse from your family size if you file separately was early implemented on July 30, 2023. If you want to include your spouse despite filing separately, you’ll need to submit alternative documentation of income manually.
This nuance matters when trying to lower your monthly payment or optimize household size for IDR calculations.
High-Income Borrowers: What to Do While SAVE is on Hold
Originally, the SAVE Plan was a game-changer for higher-income borrowers — especially those with high debt balances and PSLF eligibility. But with SAVE on pause, many of those benefits are off the table, at least for now.
PSLF remains active and unaffected, but:
- You don’t earn PSLF credit while in SAVE-related forbearance.
You may still be able to “buy back” lost time using the forbearance credit buyback process if it becomes available.
Next Steps: How to Pivot and Plan During SAVE Plan Uncertainty
With forgiveness rules changing by the month, waiting could cost you time, credit, and money. That’s where we come in.
Schedule a Student Loan Strategy Session to:
- Review how the court injunctions and pending GOP legislation may affect your forgiveness path;
- Compare your options under IBR, PAYE, ICR, and evaluate what’s smartest given today’s rules;
- Get guidance on what to do now — and how to pivot if the legal landscape changes again;
- Receive one month of email support to help implement your plan and respond to policy updates.
With the student loan landscape shifting rapidly, smart planning now can make all the difference later.
About the Author
Pedro Gomez is the new Student Loan Sherpa and a Certified Financial Planner™ with over a decade of experience helping clients navigate complex financial decisions. He is the founder of Global Financial Plan, where he writes about international living, geoarbitrage, and strategies for retiring young, and also leads Brickell Financial Group, a registered investment advisory firm focused on accelerating financial freedom.
Pedro is the architect behind the “12 Levels of Financial Freedom” framework and blends student loan strategy with long-term planning, tax efficiency, and investing. His work is especially geared toward upwardly mobile professionals, entrepreneurs, and those looking to design a life beyond the default path.
Pedro is available for strategy sessions and press inquiries.
Thank you very much for your kind answer, Michael.
Yeah, it is difficult to make a decision right now. I was concerned with staying in PAYE since my owed amount grew significantly since September. But other than that, maybe it is a good a idea not making any moves now, right?
Thank you very much, again, for helping us all navigating these complex waters right now, and taking the time to provide us such valuable information!!
Keep up the great work!!
Cheers,
Carrie
Its really hard to make any blanket statements right now because there are so many variables at play.
What I can say is that there are likely to be many changes that happen in the coming months, so waiting to see what happens next is definitely a legitimate plan that many borrowers will be using.
Thank you, Michael, for helping us understand the advantages of SAVE, even with the litigation going on.
I’m on PAYE and no income, needing to recertify. I am about to switch to SAVE, but still concerned with the fact that my husband’s income has to be factored in. It is still a good idea? Thank you for clarifying it to me.
Best
Hi Carrie,
With the results of the election, I don’t think it is a good idea to apply for SAVE right now. This article explains the various impacts moving forward.
You might be best off sticking with PAYE. You could also consider filing your taxes seperately to exclude your husband’s income from your payment calculations.