A federal court issued a significant ruling on March 10, 2026 that affects income-driven repayment (IDR) plans for federal student loan borrowers. Here’s what you need to know.
The court order prevents the U.S. Department of Education from implementing the Saving on a Valuable Education (SAVE) Plan. This means:
- SAVE Plan enrollment is blocked
- SAVE Plan payment calculations cannot be used
- SAVE Plan interest subsidies are invalidated
- SAVE Plan loan discharges are affected
These Plans Still Work
The court order affirms these income-driven repayment plans:
- Income-Based Repayment (IBR)
- Income-Contingent Repayment (ICR)
- Pay As You Earn (PAYE)
What Borrowers Must Do Now
If you have loans in forbearance because you enrolled in or applied for the SAVE Plan, you must select a new repayment plan. If you don’t act, your loan servicer will automatically move you to a different plan.
Action Items for Affected Borrowers
- Select a New Repayment Plan – Use the Repayment Calculator to find the best option for your situation
- Apply for IBR, ICR, or PAYE – These plans are still available and processing applications
- Sign Up for Auto Pay – Save 0.25% on your interest rate by enrolling in automatic payments
- Provide Tax Information Consent – This speeds up applications and enables automatic annual recertification
What Was Invalidated?
The court action invalidated most of the July 2023 rule “Improving Income Driven Repayment,” including:
- SAVE Plan and REPAYE Plan payment formulas
- SAVE Plan discharges and interest subsidies
- Weighted average payment calculations for consolidation loans
- Defaulted borrower access to IBR Plan
One Provision That Remains
The court order preserves one provision from the July 10, 2023 rule, though the specific details weren’t fully outlined in the announcement.
Bottom Line
Act now to select a repayment plan that meets your goals. Don’t wait for your servicer to assign you a plan automatically. Contact your loan servicer to discuss your options and ensure you’re on the right track for repayment.
This information is based on the official Federal Student Aid announcement. For the most current updates, check studentaid.gov regularly as the Department of Education continues to provide new information.
https://studentaid.gov/announcements-events/idr-court-actions
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