Student Loan Forgiveness Lawsuit Updates - January 2025

• As of January 16, 2025, past payments now count toward forgiveness under the IDR adjustment, but some borrowers report errors when checking their updated counts on StudentAid.gov.

• The SAVE Plan remains blocked until at least December 2025, pausing payments, but time in forbearance won’t count toward PSLF unless covered by the IDR adjustment.

• Loan discharges for defrauded borrowers under the Sweet v. Cardona settlement are still moving forward, though delays are expected.

A lot has changed since our last student loan forgiveness update. The SAVE Plan is blocked, lawsuits are still in play, and a new administration is stepping in. Millions of student loan borrowers are stuck in limbo, waiting for answers.

Here’s what you need to know:

• The SAVE Plan is frozen until at least December 2025. Payments are on hold, but they won’t count toward PSLF unless covered by the IDR adjustment.

• Lawsuits are still threatening student loan forgiveness. Cases like Alaska v. Department of Education and The Eastern District of Missouri v. Biden argue that the Department of Education overstepped its authority.

• Trump’s administration will shake up student loan policies, but no changes yet. Major overhauls need congressional approval, so for now, some programs are still intact.

• Biden’s last push for forgiveness helped 5.3 million borrowers. But any new forgiveness efforts are on shaky ground.

• The Sweet v. Cardona settlement is still in motion. Eligible borrowers defrauded by for-profit schools are seeing loan discharges, though delays continue.

Student loan forgiveness isn’t gone, but it’s up against serious roadblocks. This guide breaks down what’s happening, what it means for you, and what you can do now to stay on track.

The legal fight over the SAVE Plan has put millions of borrowers in limbo, especially those counting on Public Service Loan Forgiveness or Income-Driven Repayment plans. And as of January 2025, the future is still up in the air.

Where Things Stand Now

As of January 2025, the SAVE Plan remains blocked by a court order following an injunction issued by the 8th Circuit Court of Appeals in August 2024. The Supreme Court struck several of Biden’s student loan forgiveness programs. If you’re unfamiliar with this legal action, this blog post will catch you up: SAVE Plan Blocked.

Two major lawsuits, namely Alaska v. Department of Education and Missouri v. Biden, are challenging the plan, arguing that the Department of Education doesn’t have the authority to enact a broad program to forgive student loans without Congress.

Right now, about 8 million borrowers are in interest-free administrative forbearance, which is expected to last until at least December 2025.

The outcome? It could go in three directions:

• The SAVE Plan gets killed completely.

• It gets reinstated in full.

• A middle ground. Some parts stay, and others get struck down.

Before leaving office, Biden still managed to cancel $188.8 billion in student loans for 5.3 million borrowers across 33 executive actions. But with the Trump administration now in charge, new forgiveness efforts are uncertain at best.

What This Means for Borrowers

• No payments are required while the SAVE Plan forbearance is active.

• No interest is accruing during this period.

• Time in forbearance does NOT count toward PSLF. But if you qualify under the IDR adjustment, some of it may still count toward forgiveness.

The one-time IDR account adjustment, which retroactively credits past payments toward forgiveness, was finalized on January 16, 2025. Borrowers can now log into StudentAid.gov to check their updated payment counts using the new IDR tracker.

But here’s the problem: some borrowers are seeing discrepancies in their counts, adding even more uncertainty to their forgiveness timelines.

Learn More: When Will IDR Adjustments Be Made?

What You Should Do Now

1. Check your IDR payment count. Log into StudentAid.gov and review your updated tally.

2. Dispute errors immediately. If your count looks wrong, file a dispute with the FSA Ombudsman.

3. Stay in the loop. Watch for updates from your student loan servicer about repayment plans and possible SAVE reinstatement.

4. Consider backup IDR plans. The Department of Education has reopened Income-Contingent Repayment (ICR) and Pay-As-You-Earn (PAYE)—both options if SAVE remains blocked.

The student loan system is a mess, and this legal battle isn’t making it any easier. But while SAVE is tied up in court, you still have moves to make. Keep checking your IDR counts, dispute any errors, and be ready to pivot if needed.

“Is staying on the SAVE Plan still a good idea?” “Should I switch repayment plans?” If these questions are running in circles in your head, you’re not alone.

The new year and new administration have arrived, but borrowers still don’t have clear answers—and we might not get them anytime soon. Trump has promised big changes to student loan forgiveness and repayment plans, but so far, he still has not implemented any drastic measures.

What’s Changing Under the Trump Administration?

Trump took office on January 20, 2025, and policy changes are coming. But here’s the catch: major overhauls need congressional approval, so nothing can happen overnight.

For now, the Department of Education is still up and running with Denise Carter as acting Education Secretary while Linda McMahon waits for confirmation.

How This Affects Borrowers

• Forgiveness Progress: The SAVE Plan is frozen, but other IDR plans are still available. The IDR account adjustment is complete, and borrowers can now check their payment counts on the Federal Student Aid website.

• Financial Planning Uncertainty: Some borrowers can’t qualify for mortgages because of the confusion surrounding loan repayment.

• No Clear Policy Direction: The future of student loan forgiveness under Trump is still a big question mark, leaving borrowers anxious.

• Reevaluating Repayment Plans: Those who switched to the SAVE Plan are now second-guessing that decision with the program on hold.

Biden’s Final Push for Loan Forgiveness

Before leaving office, Biden made one last move on student loan forgiveness. On January 16, 2025, his administration approved over $600 million in cancellations, covering:

• 4,550 borrowers under Income-Based Repayment (IBR).

• 4,100 borrowers through borrower defense approvals.

This brought Biden’s total forgiveness to $188.8 billion, wiping out student loan debt for 5.3 million borrowers across his presidency. But that chapter is closed. Now, under Trump, student loan forgiveness faces an uncertain future.

What’s Coming Under Trump?

Trump has slammed Biden’s student loan policies as “a total catastrophe.” Still, he hasn’t announced specific plans for the SAVE Plan or other student debt forgiveness programs yet. Experts predict changes, but no one knows how far they’ll go. If you were counting on forgiveness under the Biden administration, prepare for the possibility that some programs won’t survive.

Sweet v. Cardona: Loan Forgiveness for Defrauded Borrowers

For borrowers waiting on Sweet v. Cardona relief, the case is still moving forward, at least for now.

In November 2024, the Ninth Circuit upheld the settlement, confirming that defrauded borrowers are still entitled to loan forgiveness. Unfortunately, the Department of Education missed its July 2024 deadline to process relief for 33,000 borrowers in “Decision Group 1.”

That deadline got pushed to December 20, 2024, and delays continue to frustrate borrowers waiting for discharges.

You can stay up to date on the progress of this lawsuit via the Project on Predatory Student Loan Lending and the Borrower Defense subreddit.

Trump is officially in office, but what that means for student loan forgiveness and repayment programs is still unclear. He’s hinted at cutting forgiveness programs, but nothing is final until it’s final. As legal battles drag on, here’s what borrowers should expect in the coming months.

The SAVE Plan Forbearance Might Last Longer

A court order still blocks the SAVE Plan, and student borrowers enrolled in it remain in interest-free administrative forbearance until at least December 2025. That means no payments are required, but this time, it won’t count toward PSLF unless it qualifies under the IDR adjustment. If you’re affected, keep an eye on legal developments and start looking into alternative repayment plans just in case.

Related: When Is Forbearance Over?

Broad Loan Forgiveness Is Moving Slowly

The Trump administration hasn’t officially canceled broad student loan forgiveness, but it’s unlikely to happen. Borrowers should plan on relying on existing relief programs like Public Service Loan Forgiveness (PSLF) and Income-Driven Repayment (IDR) forgiveness. If you were counting on automatic forgiveness under SAVE, that’s off the table. But PSLF and long-term IDR forgiveness are still valid paths. For now.

Repayment Plans Could Change

The Trump administration hasn’t announced specific changes to repayment plans yet. But, the Department of Education has reopened applications for other IDR plans, including:

• Income-Based Repayment (IBR)

• Pay As You Earn (PAYE)

• Income-Contingent Repayment (ICR)

Borrowers who need to switch plans or enroll in a new one should check their options now, as future policy changes could make it harder to enroll in certain plans.

Related: Income-Driven Repayment for Student Loans

Borrower Defense Forgiveness Is Still Moving

The Sweet v. Cardona settlement is still in effect, and previously approved discharges aren’t at risk of being reversed. Once a loan is discharged, it’s final, even under a new administration. The Biden administration structured these discharges as legally binding, which means President Trump can’t “claw back” forgiven loans. If you’re still waiting for forgiveness, expect delays, but rest assured that loans that have already been discharged will not be reinstated.

The Department of Education Is Still Standing

Despite Trump’s past promises to dismantle the Department of Education, it hasn’t been eliminated. This intention is part of Trump’s mission to transform the current federal government.

As of January 20, 2025, Denise Carter is serving as Acting Secretary of Education while Linda McMahon awaits confirmation. Policy changes are still possible, so borrowers should stay alert for any major shifts in loan servicing or program administration.

With the SAVE Plan still blocked and lawsuits challenging Biden’s forgiveness efforts, the future of student loan forgiveness remains uncertain under the Trump administration. Borrowers relying on IDR or PSLF must stay proactive, as policy shifts could impact repayment plans and forgiveness timelines.

Now is the time to check your IDR payment count on StudentAid.gov, monitor legal developments, and explore backup repayment options like IBR, PAYE, or ICR if needed.

Don’t wait until policy changes leave you without options.

Book a consultation with our student loan forgiveness lawyer today for expert guidance tailored to your situation.

Related reading:

• Do Student Loans Ever Go Away?

• Did Student Loan Forgiveness Pass?

• PSLF Updates You Should Know

• How to Apply For Student Loan Forgiveness

• Student Loan Recertification — On Hold For Until 2025