Key Points
- A coalition of Republican-led states has asked a federal court to pause its recent dismissal of the lawsuit challenging the SAVE student loan repayment plan.
- Missouri filed a motion seeking a temporary stay while the states appeal to the U.S. Court of Appeals for the Eighth Circuit.
- For borrowers, nothing changes until the U.S. Department of Education issues new guidance.
The legal fight over the federal government’s SAVE income-driven repayment plan is not over. Last week, a judge dismissed the ongoing SAVE lawsuit for being moot.
However, the State of Missouri, joined by several other Republican-led states, filed a motion (PDF File) asking the judge to temporarily pause his dismissal of the case while the states pursue an appeal.
The filing seeks what is known as an “administrative stay” - a short-term pause designed to give the U.S. Court of Appeals for the Eighth Circuit time to consider whether the lawsuit should remain active. The states argue that dismissing the case could allow the SAVE plan to move forward again, despite an earlier appellate ruling that found the rule is likely unlawful.
While the SAVE plan is already on life support because of the administrative forbearance and legislative end due to the One Big Beautiful Bill Act, the outcome of these rulings could potentially provide borrowers some short-term relief.
For now, however, borrowers should not expect any immediate changes.
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What Missouri Is Asking The Court To Do
The motion, filed in the U.S. District Court for the Eastern District of Missouri, asks the court to temporarily stay (or freeze) its own order dismissing the case.
The states argue that the district court’s dismissal effectively nullifies a prior order from the Eighth Circuit directing the lower court “to enjoin the entire SAVE Rule.” In other words, the states argue that the appellate court already ruled that SAVE should be blocked, and the dismissal undermines that directive.
They are requesting the stay by Wednesday, March 5, 2026, at 5pm so the Eighth Circuit can consider their forthcoming emergency appeal. The filing warns that, without a stay, “individuals could start applying for student loan relief once again” under the SAVE plan.
The states also argue that a change in presidential administration does not automatically resolve the legal issues surrounding the rule. Citing Supreme Court precedent, they note that a new administration cannot rescind or alter a federal regulation without following formal rulemaking procedures.
Interestingly, the United States indicated in the filing that it “takes no position on this motion at this time.”
The 8th Circuit Has Already Seen This Case Before
This latest motion follows a previously significant ruling from the Eighth Circuit, which previously concluded that the SAVE rule was likely unlawful and directed the lower court to enjoin it in full, according to the states’ filing.
The district court later dismissed the case without prejudice (meaning it was dismissed but could potentially be refiled). The states argue that dismissal is inappropriate because the merits of the case have already been litigated extensively, including before the appellate court.
Honestly, the procedures here are complex.
In practical terms, the states are trying to preserve the existing injunction blocking SAVE while they pursue further appellate review. Without that stay, they argue, the SAVE rules are active. This could mean that borrowers could receive forgiveness or subsidies the 8th Circuit Court previously said were likely unlawful.
Borrower advocates are already pushing the Department of Education to follow through on loan forgiveness for any eligible borrowers now that the SAVE rule is in effect.
What This Means For Borrowers Right Now
For borrowers, the most important point is this: Nothing changes unless and until the Department of Education says it does.
Federal student loan repayment programs are administered by the U.S. Department of Education. Court rulings can change the legal rules, but operational changes require formal action and guidance from the department and its loan servicers.
Even the states’ motion acknowledges that SAVE has already been “administratively stayed or preliminarily enjoined for nearly two years,” and that borrowers’ payment obligations have remained under that status quo.
Historically, when courts have blocked or reinstated student loan programs, the Department of Education has issued detailed guidance explaining how borrowers are affected. Until such guidance appears, borrowers simply need to wait and plan appropriately.
Regardless of how this court case turns out, SAVE will send end by law no later than June 30, 2028 - along with PAYE and ICR. For many borrowers, the math makes sense to not wait in limbo any longer. While the headlines and back-and-forth can create anxiety for borrowers, the key is making an individual plan based on your individual personal financial situation.
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Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.