Student loan bills could double for some borrowers as Biden-era relief expires
Natalia Lebedinskaia | Moment | Getty Images
As a Biden-era relief measure for federal student loan borrowers comes to an end, some people could see their bills more than double.
Earlier this month, the Trump administration announced that the so-called SAVE interest-free payment pause 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.
The Biden administration had moved people who enrolled in its SAVE plan into forbearance — a period during which federal student loan borrowers are excused from making payments — while the legal challenges against its program played out. The SAVE, or Saving on a Valuable Education, plan, is now essentially defunct.
While borrowers can remain in the SAVE forbearance for the time being, they’ll face interest charges again starting next month if they do.
But those who look to move into another repayment plan will likely face a much larger monthly bill.
“SAVE was incredibly generous,” said Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers.
to help you determine how much your monthly bill would be under different plans.
Carolina Rodriguez, director of the Education Debt Consumer Assistance Program, said she’s working with one partner in a married couple, both with federal student loans, who are facing a nearly $4,000 monthly combined student loan payment under IBR.
“My client said that these payments would mean no extracurricular activities and other opportunities for his children, which might set them back in comparison to their peers,” Rodriguez said.
Under SAVE, the family’s student loan bill would have been around $2,400, she said.Â
Borrowers who can’t afford to make a monthly payment on their student debt under the current repayment options can pursue deferment and forbearance options.
Those who’ve taken out loans before July 1, 2027, will maintain access, for example, to the economic hardship deferment and the unemployment deferment, under the new law.
[title_words_as_hashtags
