Student Loan Interest to Resume August 1

The U.S. Department of Education will resume charging interest on federal student loans for nearly 8 million borrowers in the Biden-era SAVE plan beginning August 1, after a series of court rulings found the plan unlawful. Payments remain paused, but borrowers are expected to accrue up to $3,500 in annual interest, collectively amounting to billions in added charges. The policy reversal comes as the Trump administration cites fiscal responsibility and compliance with court orders blocking Biden's debt relief measures. Borrowers are being urged to switch to legally compliant repayment plans, such as the Income-Based Repayment (IBR) plan. Critics, including borrower advocacy groups, warn that the abrupt shift will worsen financial hardship and accuse the administration of mismanagement. The Education Department is conducting outreach to help borrowers transition, but many face uncertainty due to limited time and strained loan servicing resources.