The Biden-era SAVE program has ends August 1 and borrowers might be in for a shock.
Transcript:
CAROLINE WOODS: August 1st isn’t just the tariff deadline —it’s also when a key Biden-era student loan relief measure ends.
The SAVE Plan—short for Saving on a Valuable Education—will expire, and education debts will start growing again if borrowers aren’t paying enough to cover the interest.
Right now, 7.7 million people are enrolled in SAVE—and many could see their monthly bills more than double.
Education Secretary Linda McMahon is urging borrowers to switch to a legally compliant plan, like Income-Based Repayment, or IBR. But that could mean higher payments—IBR takes 10% of discretionary income, compared to 5% under SAVE. That jumps to 15% for some borrowers with older loans.
Republicans have passed legislation creating a new option called the Repayment Assistance Plan, or RAP, launching by July 2026. But whether it offers lower payments than IBR remains to be seen—it’ll depend heavily on a borrower’s income.
And for those struggling to make any payments, deferment or forbearance may be an option.
Bottom line: Check your loan details, compare repayment plans, and take action before August 1st to avoid a payment shock.
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