Student Loans Must Be Forgiven And Cannot Be Kicked Off SAVE Plan, Says Amended Lawsuit Student loan borrowers have filed an amended lawsuit against the U.S. Department of Education, arguing that the agency’s plan to terminate the SAVE repayment program and force borrowers into other repayment options is unlawful. The lawsuit contends that qualifying SAVE plan borrowers should receive loan forgiveness or be transferred to the REPAYE plan, rather than being subjected to other repayment methods. This legal challenge arises as the Education Department prepares to transition millions of borrowers out of the SAVE plan starting in July, following a settlement that ended both SAVE and its predecessor, REPAYE. The department has sought to dismiss the lawsuit, asserting that the termination of these programs is final and that current law no longer authorizes them. Despite the ongoing legal battle, borrowers are advised to prepare for selecting new repayment plans, as the department’s timeline for transitioning out of SAVE remains unchanged. The lawsuit, filed by four student loan borrowers, argues that the Education Department’s handling of the SAVE plan’s termination was unlawful. The plaintiffs concede that Congress authorized the termination of SAVE in legislation passed last year, which also phases out other income-driven repayment plans like PAYE and ICR. However, the legislation does not mandate the termination of these programs until 2028. The plaintiffs assert that because there was a period during the litigation when SAVE was not blocked, borrowers who qualify should still be eligible for the program’s benefits, including student loan forgiveness if they met the 20- or 25-year threshold.#save_plan #linda_mcmahon #us_department_of_education #repaye_plan #eighth_circuit_court_of_appeals
Student Loan Defaults Surge to 2.6 Million in Q1 2026, New York Fed Reports The Federal Reserve Bank of New York reported that 2.6 million student loan borrowers defaulted in the first quarter of 2026, marking the first time since the COVID-19 pandemic that defaults have appeared on consumers’ credit reports. The data, released in a blog post, also noted that approximately 1 million borrowers defaulted during the fourth quarter of 2025. These defaults are concentrated among older borrowers, residents of Southern states, and individuals who were not behind on their federal student loans prior to the pandemic. The New York Fed highlighted that the surge in defaults is linked to the resumption of repayment obligations for borrowers who had previously benefited from pandemic-related relief measures. Over the past three years, more than 40 million federal student loan borrowers were exempt from making payments due to the pandemic. However, the U.S. Department of Education’s “on-ramp” period, which lasted from October 2023 to October 2024, prevented late payments from being reported to credit bureaus. It typically takes 270 days of missed payments for a loan to enter default status, which explains why defaults only recently appeared on credit reports. The report also noted that a second wave of defaults could emerge as millions of borrowers who enrolled in the now-defunct Biden-era Saving on a Valuable Education (SAVE) plan are forced to resume repayment. The SAVE plan, which allowed borrowers to pause payments since the summer of 2024, was terminated earlier this year by a federal appeals court. Borrowers who signed up for SAVE have been excused from making payments since the summer of 2024.#save_plan #federal_reserve_bank_of_new_york #us_department_of_education #new_york_fed #bidenera
U.S. Department of Education Launches Title IX Probe into Smith College's Transgender Admissions Policy The U.S. Department of Education has initiated a Title IX investigation into Smith College, following a complaint filed by the conservative group Defending Education. The probe, announced on Monday, centers on allegations that the women’s college discriminates against biological women by admitting transgender students. The complaint, first submitted in 2025, claims that Smith’s policy of allowing students who “self-identify” as women to enroll violates federal law. Smith College, a 155-year-old institution, has admitted transgender and nonbinary students since 2015. This policy, which allows enrollment based on self-identification without requiring surgical confirmation, is common among U.S. women’s colleges. However, Defending Education argues that the college’s acceptance of students born male and its use of all-gender bathrooms and locker rooms contravene Title IX, the 1972 civil rights law prohibiting sex discrimination in federally funded institutions. The complaint references United States v. Virginia, a 1996 Supreme Court ruling that invalidated the male-only admissions policy of the Virginia Military Institute. Defending Education Vice President Sarah Perry stated that Smith’s policy undermines its status as a women’s college, arguing that admitting individuals who were assigned male at birth “mocks” the institution’s commitment to women-only spaces. She emphasized that the college’s bathroom and facility policies, which allow access to all-gender spaces for anyone who identifies as a woman, compromise the safety and privacy of cisgender women.#smith_college #defending_education #us_department_of_education #united_states_v_virginia #calliope_wong
