Interest will restart for SAVE borrowers whose loans remain in a general forbearance on Aug. 1. Viva Tung/CNET
Starting on Aug. 1, borrowers who are enrolled in the Saving on a Valuable Education plan will begin accruing interest charges on their loan balances. The Department of Education is encouraging borrowers to pick a new payment plan, but you also have the option to leave your loans where they are.
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. While moving to a new payment plan before August could make sense for some borrowers, it's not a requirement.
Payments for borrowers in SAVE will remain on hold in a general forbearance. Whether you decide to move to a new repayment plan or not this month 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 been through years of unprecedented policy changes. 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 enrolled in SAVE and not sure what to do next, here's what experts suggest.
What should PSLF borrowers enrolled in SAVE do before Aug. 1?
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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