Trump to end student loan payment pause: Borrowers have a short window' to act, advocate says

• Student loan borrowers enrolled in the interest-free SAVE forbearance will soon see their debt begin to grow again, the Trump administration says.
• Borrowers should take steps to find another repayment plan as soon as possible, experts said.

Millions of federal student borrowers whose loans have been in an interest-free pause will see that relief come to an end within weeks.

The Trump administration announced on July 9 that the so-called SAVE forbearance 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.

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Nearly 7.7 million federal student borrowers enrolled in the Biden-era Saving on a Valuable Education, or SAVE, plan, the Education Department said in its press release earlier this month.

“There is a short window before interest begins to accrue again for SAVE Plan borrowers, and they need to set aside some time to decide on their next steps,” said Elaine Rubin, director of corporate communications at Edvisors, which helps students navigate college costs and borrowing.

Here's what borrowers need to know about the end of the payment pause.

Why is the interest-free forbearance ending?

Former President Joe Biden rolled out the SAVE plan in the summer of 2023, describing it as “the most affordable student loan plan ever.”

But millions of borrowers who signed up for the plan were caught in limbo after GOP-led lawsuits led to a block on the plan last year. The Biden administration put these borrowers in a forbearance while the legal challenges played out, and stopped interest from accruing on people's debts in the meantime.

Forbearances are a period during which federal student loan borrowers are excused from making payments.

The Trump administration has called the SAVE plan illegal. In the announcement ending the pause, it said the Education Dept. “lacks the authority to put borrowers into a zero percent interest rate status.”

The Biden administration “invented a zero percent 'litigation forbearance,' forcing taxpayers to foot the bill,” the Education Dept. wrote.

Borrowers enrolled in the forbearance will not be charged interest retroactively, the department said.

What should SAVE enrollees do now?

Because the SAVE plan is no longer available and its interest-free forbearance is ending, borrowers need to move quickly to find a new repayment plan, experts said.

Unfortunately, the options are limited.

Currently, there is only one income-driven repayment plan available to borrowers: the Income-Based Repayment plan, said higher education expert Mark Kantrowitz. (Income-driven repayment plans cap borrowers' monthly bills at a share of their discretionary income, with the aim of making payments affordable.)

President Donald Trump's “one big beautiful bill” establishes another IDR repayment plan, known as RAP, but that plan won't be operational until next year.

“The Department urges SAVE borrowers to consider enrolling in the Income-Based Repayment Plan authorized under the Higher Education Act until the Department can launch the Repayment Assistance Plan,” the agency said in its release.