The U.S. Department of Education filed its reply brief in support of its motion to dismiss in Havens v. U.S. Department of Education on August 17, 2026, closing out the briefing schedule in the last lawsuit still trying to revive REPAYE for roughly 7 million former SAVE borrowers. The filing asks the judge to dismiss the case.
Hours earlier, the Education Department’s lawyers filed a Notice of Corrected Filings walking back a factual claim the agency made on July 29. In an earlier brief, the Department told the court that four of five non-party borrowers who submitted declarations “most recently reported incomes of $0,” which would mean their payments would be $0 under any plan and no irreparable harm existed.
Those borrowers filed counter-declarations on August 7 saying they had reported real income, either directly or through the IRS. The agency investigated, found the borrowers were right, and blamed “technical errors” with its National Student Loan Data System database. It filed corrected versions of both the brief and apologized. Even so, the agency’s core position that the case should be tossed has not changed.
Would you like to save this?
We'll email this article to you, so you can come back to it later!
Why It Matters
An agency conceding that its own loan database produced wrong income figures in a federal filing is not a small thing when 7 million borrowers sat in SAVE forbearance for two years waiting on that same system to process applications.
The Department says the error is “largely immaterial” to its legal arguments, and on the merits of this case it may be right. But it hands the plaintiffs a credibility argument at the exact moment the judge is weighing whether borrowers face irreparable harm from being forced off SAVE.
And for the rest of the 43 million student loan borrowers it opens real questions onto the accuracy of their loan accounts in general. This comes as other errors have been found and correct recently, such as PSLF calculations.
What The Borrowers Are Asking For
The four named plaintiffs filed their motion for a preliminary injunction and stay back on June 23, 2026.
Their main ask is a nationwide injunction of what they call the “shadow repeal” of REPAYE and postpone the policy of involuntarily moving enrolled borrowers to other plans, holding everyone in place until final judgment.
The borrowers’ lawsuit centers around four main theories:
- They say the Department repealed REPAYE and its interest subsidy without notice-and-comment or the negotiated rulemaking the Higher Education Act requires, which is the same process the Department followed when it finalized the new repayment plans for July 2026.
- They say the agency exceeded its statutory authority by unilaterally shelving a lawfully promulgated plan and transferring borrowers out of it.
- They say the decision was arbitrary and capricious because the agency gave no reasoning and ignored the reliance interests of millions of borrowers whose data it holds.
- They say enrolling a borrower in REPAYE on request is a duty the agency unlawfully withheld.
The harm numbers are specific, and they are the reason the $0-income error mattered. Havens estimates roughly $64,000 in federal tax liability if her discharge date slides into 2026 or later, while Robeson estimates about $90,000, which she says exceeds her annual income.
That is the student loan tax bomb in practice, and it is only happening because the 2021–2025 federal exclusion has lapsed.
On monthly payment increases, the borrowers claim increases of $196 for Havens, $76 for Grunseth, and $41 for Boykin. They argue none of it is recoverable later if they’re forced to resume, because the APA’s sovereign immunity waiver limits relief to non-monetary remedies.
What The Department Is Asking For
The reply by The Department of Education hass four counterarguments, and each one alone would end part of the case:
- Standing on the tax claims. Havens and Robeson want a court order blocking the agency from sending the IRS a Form 1099-C reporting their future discharges. The Department says that injury is self-inflicted, because borrowers have been eligible for loan forgiveness and simply don’t want to because they missed the deadlines last year. It also argues the IRS (not the Department of Education) has the final say on taxes, so the question is not one this court can fix.
- The REPAYE revival claim. Plaintiffs say vacating the SAVE rule automatically put the 2015 REPAYE rule back into force. The Department says that an agency cannot reinstate an old rule sharing the same legal defect as the one that replaced it, and the Eighth Circuit in Missouri v. Trump held that REPAYE and SAVE share exactly that defect. That is the main ruling that ended SAVE by court order.
- The forced plan switch. The Department notes both sides agree this claim stands or falls with the REPAYE claim. The One Big Beautiful Bill Act requires every ICR borrower to select a new plan before July 1, 2028 regardless, which is why PAYE and ICR are ending and why RAP and IBR are the plans left standing.
- The 11-day window. Plaintiffs argue that when the Eastern District of Missouri briefly dismissed Missouri v. Trump on February 27, 2026, the injunction against the SAVE rule dissolved and forgiveness rights vested during the 11 days before the Eighth Circuit reversed. The Department calls that a collateral attack on the Eighth Circuit and says judicial retroactivity wipes out any theoretical benefit.
How This Connects
The stakes are a lot smaller than many headlines have promised. This won’t revive the SAVE plan. And it’s iffy if it even revives the REPAYE plan. Two plaintiffs are chasing favorable tax treatment and two are chasing monthly payment math totaling about $1,320 over two years.
For most of the 7 million, REPAYE isn’t the best answer. It requires using spousal income even if you file jointly, and it has a 20 or 25 year forgiveness timeline as well. And the payment calculation is identical to PAYE or new IBR.
What’s Next
Now that the briefings are done, we wait.
No hearing is scheduled, and none is required. The judge can rule on the case whenever she chooses, on both the preliminary injunction and the motion to dismiss, most likely in a single opinion.
When can people expect something: No court sets a deadline for this, so any date is an estimate, but there are two hard anchors.
The Department has told the court the earliest a borrower can be forced to move is September 29, 2026, and Heather Havens received a 90-day notice around July 14 that expires in mid-October. If the judge is inclined to pause the transition, she would need to rule before those dates. That points to a ruling in the next four to six weeks, so call it late September.
If nothing comes by early October, that silence is itself a signal — it likely means she is writing a dismissal rather than an injunction, and that opinion could land anytime through year-end.
What could borrowers possibly expect: Three outcomes. Our opinion is that most likely, the court dismisses the case, REPAYE stays dead, and the move to IBR or RAP proceeds on schedule.
Second, the court denies dismissal and lets the case go to the merits, which buys months of uncertainty but does not restore REPAYE or stop the plan switch by itself.
Third and least likely, the court grants a stay pausing the involuntary repayment plan transfers. However, it’s like this would be just a pause, not a REPAYE revival, and the Department would almost certainly appeal within days.
There is also a wildcard worth mentioning: relief limited to the four named plaintiffs, which would be a win in the caption and change nothing for anyone else.
The financial planning assumption for borrowers should stay the same: pick a repayment plan by your deadline. It’s not likely REPAYE is coming back. And continuing to wait is costing you each month.
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.