Starting August 1, interest on student loans for borrowers in the SAVE repayment plan will resume after a year of suspension. This change follows a court order that did not specifically direct the restart of interest charges. The Trump Administration's Department of Education encourages borrowers to transition to different income-driven repayment plans. The SAVE plan, initiated by Biden, aimed to lower monthly payments and streamline the loan forgiveness process but has encountered legal obstacles, leaving nearly 8 million borrowers without required payments during the forbearance period.
President Donald Trump's Department of Education announced interest charges will restart on August 1 for student-loan borrowers enrolled in the SAVE repayment plan.
The interest restart complies with a court order that upheld the block on the SAVE plan but did not explicitly instruct the department to restart interest charges.
Linda McMahon, Trump's education secretary, stated that borrowers in the SAVE Plan cannot access important loan benefits and cannot progress toward loan discharge.
The SAVE plan, established by Joe Biden, aimed for cheaper monthly payments and a shorter timeline to loan forgiveness, but has faced legal challenges.
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