New Lawsuit Seeks to Force Student Loan Forgiveness Under SAVE Plan

The lawsuit argues the Education Department is required by law to provide debt relief to millions of borrowers enrolled in the income-driven repayment program.

Published on Mar. 9, 2026

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A new lawsuit filed on Monday is seeking to force the U.S. Department of Education to immediately forgive student loan debt for millions of borrowers enrolled in the Saving on a Valuable Education (SAVE) income-driven repayment plan. The plaintiffs argue the Education Department is legally required to provide loan forgiveness and lower monthly payments under the SAVE plan, but has failed to do so amid ongoing legal challenges from Republican-led states.

Why it matters

The lawsuit comes amid ongoing uncertainty and delays around the SAVE plan, which was designed to reduce costs for borrowers and offer eventual debt cancellation. Court rulings and administrative delays have complicated the rollout of the program, leaving many borrowers in limbo and without the relief they expected.

The details

The new filing asserts the Education Department must move forward with forgiveness under the SAVE repayment plan rather than continuing to pause or delay relief while litigation proceeds. The suit claims borrowers who have already met the cancellation requirements should not be forced to wait any longer for their balances to be wiped out.

  • The new lawsuit was filed on Monday, March 9, 2026.

The players

U.S. Department of Education

The federal agency responsible for administering the SAVE income-driven repayment plan and student loan forgiveness programs.

Saving on a Valuable Education (SAVE) plan

An income-driven repayment plan created to reduce costs for student loan borrowers and offer eventual debt cancellation.

Republican-led states

States that have filed legal challenges seeking to block or dismantle the SAVE plan.

Alex Beene

A financial literacy instructor at the University of Tennessee at Martin.

Kevin Thompson

The CEO of 9i Capital Group and host of the 9innings podcast.

Julia Barnard

The higher education lead for the Debt Collective.

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What they’re saying

“When a federal district court dismissed a lawsuit against the SAVE plan last month, many borrowers viewed the move as a positive one that would hopefully reopen the plan to them. However, no movement has occurred, and for SAVE plan qualifying-borrowers, their loans remain in forbearance.”

— Alex Beene, financial literacy instructor, University of Tennessee at Martin (Newsweek)

“I don't believe the SAVE plan is likely to resume anytime soon. At some point this will have to be resolved by Congress, not the courts. So keep your eye on the midterms, because that's likely where the real decision will be made.”

— Kevin Thompson, CEO, 9i Capital Group and host, 9innings podcast (Newsweek)

“The Department of Education should immediately implement the SAVE Plan, provide the applicable credits to every single debtor, and immediately process cancellation for all eligible debtors.”

— Julia Barnard, higher education lead, Debt Collective (Newsweek)

What’s next

If the plaintiffs succeed, the lawsuit could compel the Education Department to accelerate forgiveness and resume offering full SAVE plan benefits, potentially affecting millions of federal student loan borrowers nationwide. However, the case adds another layer of legal uncertainty to an already volatile student loan system, with additional court decisions likely to determine what relief borrowers ultimately receive.

The takeaway

This lawsuit highlights the ongoing legal and political battles over the SAVE income-driven repayment plan, which has been plagued by uncertainty and delays, leaving many borrowers in limbo and without the relief they expected. The outcome of this case could have significant implications for millions of student loan borrowers across the country.