Student loan borrowers will soon see increased bills

The Biden-era SAVE program has ends August 1 and borrowers might be in for a shock.

Transcript

00:00August 1st isn't just the tariff deadline, it's also when a key Biden-era student loan relief measure ends.

00:07The SAVE plan, short for saving on a valuable education, will expire and education debts will start growing again

00:14if borrowers aren't paying enough to cover the interest.

00:17Right now, 7.7 million people are enrolled in SAVE and many could see their monthly bills more than double.

00:24Education Secretary Linda McMahon is urging borrowers to switch to a legally compliant plan like Income-Based Repayment, or IBR,

00:32but that could mean higher payments.

00:34IBR takes 10% of discretionary income compared to 5% under SAVE.

00:39That jumps to 15% for some borrowers with older loans.

00:43Republicans have passed legislation creating a new option called the Repayment Assistance Plan, or RAP, launching by July of 2026,

00:52but whether it offers lower payments than IBR remains to be seen.

00:56It'll depend heavily on a borrower's income.

00:58And for those struggling to make any payments, deferment or forbearance may be an option.

01:04Bottom line, check your loan details, compare repayment plans, and take action before August 1st to avoid a payment shock.

01:11That'll do it for your Daily Briefing.

01:13From the New York Stock Exchange, I'm Caroline Woods with The Street.