WACO, Texas (KXXV) — Nearly 8 million borrowers are seeing interest accrue on their student loans again as the Biden administration's SAVE plan comes to an end.
Watch the full story here:
"It's kind of scary. There's a little bit of uncertainty about what's going to happen next," said Kyle Putman, a Waco native.
As of Friday, borrowers who were part of the Saving on a Valuable Education (SAVE) plan are once again accruing interest on their student loan debt. These borrowers have been in administrative forbearance since last summer, which paused both mandatory monthly payments and interest accrual.
"I have made several payments. I did kind of put that on pause just to see what was going to happen, and since it hasn't been accruing interest. I bought a home when I moved back to Waco, so a lot of my focus was paying off things with higher interest rates while I had the benefit of having 0% interest," Putman said.
Putman, who attended the University of North Texas and graduated in 2014, was on the SAVE plan. He plans to resume making payments.
"My plan is to make at least enough to cover the interest until I see what my payments will be," Putman said.
While federal student loan servicers will begin charging interest on impacted loans, borrowers remain in forbearance and are not required to make any payments yet. However, when the SAVE plan forbearance ends, they will be responsible for making monthly payments that include any accrued interest and principal amounts.
Student loan expert Mark Kantrowitz says that repayment plans under President Trump could be more expensive but simpler.
"For new borrowers as of July 1 of 2026, there are only two repayment plans, a standard repayment plan and then the RAP plan, which is an income-driven repayment plan," Kantrowitz said.
"These repayment plans aren't as generous, and they require higher payments than the old repayment plans. But there are only two of them, so that is in some ways, a little simpler," Kantrowitz added.
As many borrowers remain in the SAVE plan forbearance, it's unclear when the Trump administration will end that status for borrowers.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
