Student Loan Interest Resumes, Repayment Plans Changed

Nearly 8 million U.S. student loan borrowers enrolled in the Biden-era SAVE repayment plan will see interest charges resume on their loans starting August 1, following actions by the Trump administration and a federal court injunction that blocked key provisions of the program. Although payments remain paused, interest will accrue, and borrowers may see their loan balances increase by an average of $3,500 per year. The Trump administration has also enacted the One Big Beautiful Bill Act, which eliminated existing income-driven repayment and forgiveness options, replacing them with plans that generally require higher payments. These changes are expected to have the greatest impact on low- and middle-income borrowers, Black borrowers, Pell Grant recipients, and those without degrees. Many borrowers are facing delays and uncertainty as millions of applications to switch repayment plans are pending. The Education Department cites fiscal responsibility for these changes, while borrower advocates warn of further financial harm amid rising delinquency rates and economic pressures.