Student‑loan expert Elaine Rubin warns the 7.7 million borrowers still enrolled in former President Joe Biden's stalled Saving on a Valuable Education plan have "a short window" to act before interest starts piling on their accounts again on August 1.
What Happened: The Education Department announced on July 9 that the interest‑free forbearance shielding SAVE borrowers will expire because the courts and the Trump administration say the plan exceeds federal authority.
Officials called the zero‑percent pause an illegal Biden giveaway and told borrowers to pick a new repayment option immediately.
"There is a short window before interest begins to accrue again … borrowers need to decide their next steps," said Rubin to CNBC, director of corporate communications at Edvisors, which counsels families on college costs.
Biden unveiled SAVE in 2023, touting it as the "most affordable plan ever," but Republican‑led states sued, and an appeals court blocked its key features last year. The administration responded by freezing payments and interest and that relief ends in less than three weeks.
Why It Matters: Education Secretary Linda McMahon said resuming interest restores "fiscal responsibility" and urged borrowers to switch to the long‑standing Income‑Based Repayment plan until a new Repayment Assistance Plan (RAP) debuts in 2026. RAP is part of Trump's sweeping "One Big Beautiful Bill," which also caps graduate borrowing and scraps most other income‑driven programs.
Analysts say the about‑face could raise monthly bills by $100 to $200 for many SAVE users and swell balances by an average $3,500 a year. Servicers already face a 2 million‑application backlog, meaning some borrowers may not land in a new plan before charges restart.
Rubin urges borrowers to log in to StudentAid.gov's loan simulator, compare costs under IBR, and set up auto‑pay to avoid missed‑payment fees once interest resumes. "Waiting until July 31 is too late," she said.
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