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Terry Savage: Changes coming to income-driven student loan repayment programs

UNITED STATES, AUG 6 – Nearly 8 million borrowers in the U.S. must resume payments after the Education Department ends forbearance and cancels the SAVE Plan, risking increased debt from renewed interest accrual.

  • The Trump administration resumed interest accrual on the SAVE income-driven student loan plan on August 1, 2025, affecting nearly 7.84 million U.S. borrowers owing $439.7 billion.
  • This action follows court challenges blocking the SAVE plan, a Biden-era program designed to reduce payments and interest growth, and coincides with broader policy shifts including the 'Big, Beautiful Bill' signed in July 2025.
  • Borrowers in SAVE and other plans must consider switching repayment options by the July 1, 2026 deadline, especially Parent PLUS borrowers facing loss of forgiveness unless they consolidate and enroll in income-driven plans.
  • Student loan expert Rae Kaplan advises borrowers to act quickly, noting no need to prove hardship for income-driven plans, recommending lower payments over forbearance, and warning of higher payments under some alternatives.
  • These changes are expected to increase borrowers' monthly payments and interest accrual, pressuring many to modify repayment strategies and signaling a phase-out of the SAVE plan by July 2028 amid ongoing legal and legislative uncertainties.
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Terry Savage: Changes coming to income-driven student loan repayment programs

If you have outstanding student loans, you are likely about to encounter some significant and confusing changes. If you have participated in a plan to lower your payments or defer them based on income, you have a relatively short period…

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The Billings Gazette broke the news in Billings, United States on Wednesday, August 6, 2025.
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