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Student Loan Interest for Millions Resumes on Aug. 1 – Here’s What You Need to Know
Starting August 1, millions of individuals with student loans who are enrolled in the Saving on a Valuable Education (SAVE) plan will begin paying interest on their outstanding balances once again. This change is expected to significantly impact many borrowers, as the average monthly payment could increase by $300.
In September 2023, the Biden administration created the SAVE plan to alleviate some of the financial burden faced by millions of student loan borrowers. However, two courts subsequently issued injunctions against the program, effectively putting a halt to the repayment process. In response, the administration transitioned all enrolled individuals into zero-interest forbearance, which temporarily suspended interest accrual on loans.
Now that the SAVE plan has been paused, the Department of Education is resuming interest charges for these borrowers, citing “fiscal responsibility.” While this decision may seem financially responsible from a government perspective, it could lead to substantial increases in monthly payments for many individuals.
Source: www.cbsnews.com
