Trump to end student loan payment pause: Borrowers have ‘a short window' to act, advocate says
The Trump administration announced on July 9 that the so-called SAVE forbearance will expire on Aug. 1, and that enrollees' education debts will begin to grow again if they don't make payments large enough to cover the accruing interest.
More from Personal Finance:Trump's 'big beautiful bill' slashes CFPB funding78% say Trump's tariffs will make it harder to deal with debtTax changes under Trump's 'big beautiful bill' — in one chart
Nearly 7.7 million federal student borrowers enrolled in the Biden-era Saving on a Valuable Education, or SAVE, plan, the Education Department said in its press release earlier this month.
"There is a short window before interest begins to accrue again for SAVE Plan borrowers, and they need to set aside some time to decide on their next steps," said Elaine Rubin, director of corporate communications at Edvisors, which helps students navigate college costs and borrowing.
Here's what borrowers need to know about the end of the payment pause.
Former President Joe Biden rolled out the SAVE plan in the summer of 2023, describing it as "the most affordable student loan plan ever."
But millions of borrowers who signed up for the plan were caught in limbo after GOP-led lawsuits led to a block on the plan last year. The Biden administration put these borrowers in a forbearance while the legal challenges played out, and stopped interest from accruing on people's debts in the meantime.
Forbearances are a period during which federal student loan borrowers are excused from making payments.
The Trump administration has called the SAVE plan illegal. In the announcement ending the pause, it said the Education Dept. "lacks the authority to put borrowers into a zero percent interest rate status."
The Biden administration "invented a zero percent 'litigation forbearance,' forcing taxpayers to foot the bill," the Education Dept. wrote.
Borrowers enrolled in the forbearance will not be charged interest retroactively, the department said.
Because the SAVE plan is no longer available and its interest-free forbearance is ending, borrowers need to move quickly to find a new repayment plan, experts said.
Unfortunately, the options are limited.
Currently, there is only one income-driven repayment plan available to borrowers: the Income-Based Repayment plan, said higher education expert Mark Kantrowitz. (Income-driven repayment plans cap borrowers' monthly bills at a share of their discretionary income, with the aim of making payments affordable.)
President Donald Trump's "one big beautiful bill" establishes another IDR repayment plan, known as RAP, but that plan won't be operational until next year.
"The Department urges SAVE borrowers to consider enrolling in the Income-Based Repayment Plan authorized under the Higher Education Act until the Department can launch the Repayment Assistance Plan," the agency said in its release.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New York Post
26 minutes ago
- New York Post
US Olympic and Paralympic Committee bans transgender athletes in compliance with Trump order
The U.S. Olympic and Paralympic Committee is falling in line with an executive order from President Donald Trump banning transgender women from women's sports. The committee quietly updated its eligibility rules Monday, adding a paragraph to its 27-page 'Athlete Safety Policy' posted to its website that includes language that implies it bars transgender women from competing in women's divisions. Trump signed the 'Keeping Men out of Women's Sports' executive order — also known as Executive Order 14201 — in February. Advertisement The LA2028 official Olympic flag at Los Angeles City Hall on September 23, 2024. Getty Images 'The USOPC will continue to collaborate with various stakeholders with oversight responsibilities, e.g., IOC, IPC, NGBs, to ensure that women have a fair and safe competition environment consistent with Executive Order 14201 and the Ted Stevens Olympic & Amateur Sports Act,' the added language in the document stated. It's not clearly stated how the policy will be enforced, and it is unclear whether any American Olympians will be banned from the upcoming 2028 Summer Olympics taking place in Los Angeles. Advertisement A USOPC spokesperson told the New York Times that the committee had been having 'a series of respectful and constructive conversations with federal officials' following the president's executive order. The committee said it would work with national governing bodies to implement the new policy. 'As a federally chartered organization, we have an obligation to comply with federal expectations,' the USOPC statement read. President Donald Trump reacts after the FIFA Club World Cup 2025 Final match between Chelsea FC and Paris Saint-Germain. FIFA via Getty Images Advertisement No openly transgender woman has won an Olympic medal. The U.S. Olympic and Paralympic Committee's former policy based its rulings on 'real data and science-based evidence rather than ideology,' and that it would be 'making science-based decisions, sport by sport and discipline by discipline, within both the Olympic and Paralympic movements.' The International Olympic Committee has struggled to address the issue of transgender athletes in sports. USA Fencing updated its policy last week in response to criticism that it had been facing for allowing biological males to compete in the women's category. Part of the requirements to compete in a domestic women's competition include the language, 'Athletes who are of the female sex, provided all other entry criteria have been met.'
The Hill
26 minutes ago
- The Hill
The Memo: Trump fuels Epstein furor he wants to escape
President Trump and his allies are desperate to move past the Jeffrey Epstein controversy — but their own words and actions are having the opposite effect. Trump's decision to sue The Wall Street Journal over an Epstein-related story, his administration's choice to bar the Journal from the group of reporters who will cover the president's upcoming trip to Scotland, and Speaker Mike Johnson's (R-La.) eagerness to avoid a House vote on disclosure of Epstein material have all given fresh fuel to the story. The self-defeating aspect of this approach was typified by one social media post among the many that Trump has been issuing. On Tuesday afternoon, the president lamented that the achievements of the first six months of his second term were being underplayed because 'all the Fake News wants to talk about is the Jeffrey Epstein Hoax!' His post, of course, gave the media another reason to keep talking about it. The sense of creeping anxiety emanating from the White House over the Epstein matter is testament to the unusual discord it has caused within the Trump base. Trump's astonishing political comeback, from the nadir of the Capitol riot on Jan. 6, 2021, to winning the White House back last November, was enabled by the fierce loyalty of his 'Make America Great Again' (MAGA) supporters — and by a party that has grown ever-warier of crossing him. The Epstein matter is an unusual exception. Republican elected officials have proven uncommonly willing to break with the president — or at least create some discomfort for him. Even the Speaker has called for greater 'transparency' around Epstein, though he has more recently tried to close a perceived gap between himself and Trump. But Rep. Ralph Norman (R-S.C.) called on social media on Tuesday for a vote on disclosing the so-called Epstein files — exactly the thing Johnson has been moving to thwart. Norman said Republicans should 'vote on it before August recess and get it DONE!!' Rep. Tim Burchett (R-Tenn.) has also called for the material to be released, while Rep. Thomas Massie (R-Ky.) — who has been to the fore of the effort — is now in open defiance of Trump. Massie noted in an X post Tuesday that he had introduced 'the only binding congressional legislation' to get the Epstein material released, and 'in return, the attacks on me intensified.' Massie included in his message a screenshot of a Trump social media attack on him, in which the president called him 'the worst Republican Congressman' and 'A real loser!' Massie, in turn, used that attack to try to juice fundraising support from his supporters so he could 'stay in the ring.' The big picture, of course, is that the Speaker's reluctance to hold a vote is giving more ammunition to those who suspect Trump has something to hide. Massie told reporters Tuesday morning that Johnson seemed to want his party colleagues to 'just sort of stick your head in the sand' on the issue. It is a matter of public record that Trump and Epstein, the disgraced financier and sexual predator, were friendly acquaintances for years in the 1990s and early 2000s. Trump called Epstein a 'terrific guy' in a 2002 New York Magazine profile and also noted Epstein's fondness for women 'on the younger side.' It's also known the two later fell out, though the precise reason has never been definitively established. Some reports cite a competitive battle over real estate, others contend Trump cut contact with Epstein after the latter behaved inappropriately at the future president's Mar-a-Lago club. Trump's legal suit against The Wall Street Journal centers on the news organization's claim that a birthday message from Trump was included in an album to mark Epstein's 50th birthday in 2003. Trump insists the story, and alleged letter, are false. In terms of the politics of the overall matter, Trump is reaping what his allies sowed, at least in some regard. People around Trump stoked general suspicion of all the circumstances surrounding Epstein, who died — apparently by suicide — in 2019 while facing sex trafficking charges. The current storm was set off by the contrast between comments made by Attorney General Pam Bondi in February during a Fox News interview — where she said a list of Epstein's clients was 'sitting on my desk right now for review' — and an unsigned memo from the FBI and the Department of Justice earlier this month that contended 'no incriminating 'client list'' could be found. That set off real angst in the Trump base, with a number of MAGA-leaning commentators speaking out. The relatively meager polling that has been done in relation to Epstein underlines the political peril for the president. An Economist/YouGov poll released Tuesday found Americans disapproving of Trump's handling of the Epstein investigation by a huge margin. Fifty-six percent disapproved and just 22 percent approved. Significantly, exactly 1 in 4 Republicans disapproved of the president's actions, and an additional 30 percent declined to express an opinion. Just 45 percent of Republicans approved of how Trump had handled the matter. Those are unusually bad figures for Trump among Republicans. There is nothing very surprising about the overwhelming disapproval of the president's handling of the controversy among Democrats (only 7 percent approved), but it is also telling that independents came out against his actions by a massive 61 percent to 15 percent. For the moment, at least, Trump is stuck, and new developments are coming thick and fast. An announcement Tuesday from Bondi's social media account saying Deputy Attorney General Todd Blanche would meet with Ghislaine Maxwell set off its own new round of speculation as to possible ulterior motives. In 2022, Maxwell was sentenced to 20 years for conspiring in Epstein's abuse. Trump has tried to turn the page repeatedly. So far, unusually, it hasn't worked.
The Hill
26 minutes ago
- The Hill
Memo advises GOP to extend ACA tax credits
President Trump's 'big, beautiful bill' pays for an extension of his 2017 tax cuts in part through slashing about $1 trillion from Medicaid over the next decade. Democrats across the country are ready to make these cuts the prominent issue ahead of the midterm elections. The memo notes that all benefits from those tax cuts will be nullified because of premium increases if the subsidies are not extended. PUP Research is the sister group to PUP Advocacy, a conservative advocacy organization. 'Unfortunately, data shows that the expiration of enhanced premium tax credits on January 1, 2026, will increase health care costs to a level that will counteract the tax benefits of OBBB for over 20 million people,' the group wrote. Extra subsidies that help people afford ObamaCare premiums that were put in place during the coronavirus pandemic are set to expire at the end of the year, and there are few signs Republicans are interested in tackling the issue at all. If Congress takes no action, premiums for subsidized enrollees are projected to increase by more than 75 percent starting in January 2026, according to health research group KFF. There is broad bipartisan and public support for extending the subsidies, and the memo cited recent polling from Trump pollster Fabrizio Ward that showed Republicans losing support in the most competitive districts if the tax credits expire. But if Republicans extend them, the poll showed they can gain an advantage against Democrats in the midterms. The Republican candidate that supports extending the tax credits would lead the Democrat on the generic ballot by 6 points overall.
