The U.S. Department of Education said it will restart interest charges on Aug. 1 for roughly 7.7 million borrowers enrolled in the Saving on a Valuable Education plan, a Biden-era income-driven repayment program that has been frozen by litigation. Payments remain suspended, but interest—halted for a year—will again accrue while the legal challenge proceeds. Education Secretary Linda McMahon said the move complies with a February injunction from the 8th U.S. Circuit Court of Appeals that broadened a court order blocking key provisions of SAVE. The department will begin contacting affected borrowers this week and is encouraging them to shift into other income-driven repayment options that are not subject to the court order. Advocacy group Student Borrower Protection Center projects the change will add about $3,500 in interest per borrower annually, or roughly $27 billion in total if the forbearance lasts a full year. The administration has not indicated when monthly payments might resume, though earlier guidance suggested no sooner than December.
Nearly 7.7 million student loan borrowers will see interest start to accrue on Aug. 1, affecting those enrolled in a Biden-era repayment plan that is tied up in the courts. https://t.co/UKsSPg8SVZ
Nearly 7.7 million student loan borrowers within a Biden-era repayment plan will begin to see interest accrue once again on their student loans, the U.S. Department of Education announced Wednesday. https://t.co/6yJHTJFD7F
Interest accrual for student loan borrowers on the Saving on Valuable Education (SAVE) plan will restart on August 1, the Education Department announced. https://t.co/h6KWY0Kdj4