The Education Department announced a landmark agreement earlier this month to effectively terminate the SAVE plan, a popular repayment program for federal student loans launched under the Biden-Harris administration that has been stuck in litigation for nearly 20 months. But buried in that agreement is a provision that could place significant restrictions on the department’s ability to enact new student loan forgiveness initiatives, even under future administrations.

The settlement agreement, which is still pending court approval, largely targets the SAVE plan, a Biden-era income-driven repayment plan that offered affordable payments and eventual student loan forgiveness, typically after 20 or 25 years in repayment. But the state of Missouri and a collection of other Republican-led states filed a legal challenge against the Biden administration last year, arguing that the SAVE plan was an unlawful exercise of executive authority. After more than a year of legal wrangling, during which time more than seven million borrowers with student loans enrolled in SAVE were placed into an involuntary forbearance, the Education Department under President Donald Trump and Secretary of Education Linda McMahon entered into a settlement agreement with Missouri and the other states to end the SAVE plan and force millions of borrowers into other repayment programs. In many cases, that will result in higher monthly payments.

But one provision of the settlement agreement is not getting much attention. That provision, assuming it gets approved by the court, would put restrictions on the Education Department’s ability to enact broad student loan forgiveness in the future by essentially giving special........

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