Interest will restart for SAVE borrowers whose loans remain in a general forbearance on August 1. Viva Tung / CNET
Starting Aug. 1, borrowers enrolled in the Saving on a Valuable Education plan will start accruing interest charges on their loan balances. The trouble is, their payments remain on hold in a general forbearance. Now they're being encouraged to choose a new payment plan or face interest charges.
The Department of Education "urges all borrowers in the SAVE plan to quickly transition to a legally compliant repayment plan -- such as the Income-Based Repayment Plan," Secretary of Education Linda McMahon said in a statement in early July.
You aren't actually required to switch payment plans right now, though it might make sense in certain scenarios. Ultimately, what you should do depends on your forgiveness options and financial situation.
"It's crucial for borrowers to act based on their own personal situation," said Elaine Rubin, a student loan policy expert and director of corporate communications at Edvisors. "A borrower who chooses to stay in the forbearance or who is waiting for their payment plan application to be processed will have their loan remain in good standing."
SAVE borrowers have already been through unprecedented policy changes that have left many without a student loan payment for over five years. The SAVE repayment plan was officially shot down by the courts earlier this year, but borrowers' payments are expected to remain on hold until mid-2026 unless an upcoming court decision speeds up the timeline.
If you're a borrower enrolled in SAVE and you're not sure what to do next, here's what experts suggest.
What should PSLF borrowers enrolled in SAVE do?
If you're working toward Public Service Loan Forgiveness and are enrolled in SAVE, you can either stay in forbearance or switch to another repayment plan.
"For borrowers pursuing PSLF this won't mean very much," said Betsy Mayotte, president and founder of the Institute of Student Loan Advisors. "They can still either ride out the forbearance and plan on using what's called buy-back to get the months to count for PSLF purposes or switch plans now to another qualifying plan."
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