Student loan bills could double for some borrowers as Biden-era relief expires
Earlier this month, the Trump administration announced that the so-called SAVE interest-free payment pause will expire on Aug. 1, and that enrollees' education debts will begin to grow again if they don't make payments large enough to cover the accruing interest.
The Biden administration had moved people who enrolled in its SAVE plan into forbearance — a period during which federal student loan borrowers are excused from making payments — while the legal challenges against its program played out. The SAVE, or Saving on a Valuable Education, plan, is now essentially defunct.
While borrowers can remain in the SAVE forbearance for the time being, they'll face interest charges again starting next month if they do.
But those who look to move into another repayment plan will likely face a much larger monthly bill.
"SAVE was incredibly generous," said Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers.
Nearly 7.7 million federal student borrowers enrolled in the SAVE, plan, the Education Department said in its press release earlier this month.
Secretary of Education Linda McMahon said in a statement that borrowers in SAVE should "quickly transition to a legally compliant repayment plan — such as the Income-Based Repayment Plan."
More from Personal Finance:Trump's 'big beautiful bill' caps student loans. What it means for youWhy 22 million people may see a 'sharp' increase in health premiums in 2026Trump's 'big beautiful bill' cuts SNAP for millions of families: Report
Borrowers who wanted to be in the SAVE plan but now can't be should probably switch into the IBR plan, Buchanan said: "That's the best plan for almost everyone."
There are a few reasons for that. One is that other income-driven repayment plans will eventually be phased out under President Donald Trump's "big beautiful bill."
(Congress created income-driven repayment plans back in the 1990s to make student loan borrowers' bills more affordable. The plans cap borrowers' monthly payments at a share of their discretionary income and cancel any remaining debt after a certain period, typically 20 years or 25 years.)
But borrowers could see their monthly bills double under IBR, compared with on SAVE.
That's because the SAVE plan calculated payments based on 5% of a borrower's discretionary income. IBR takes 10% — and that share rises to 15% for certain borrowers with older loans.
Many federal student loan borrowers simply won't be able to afford the payments under IBR, said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York City.
"In severe cases, it could result in people being forced to move, or they will just resign themselves to default and involuntary collections," Nierman said.
In the new legislation passed by Republicans, borrowers will have access to another income-driven repayment plan, called the "Repayment Assistance Plan," or RAP, by July 1, 2026.
However, it's uncertain whether a borrower will have a lower monthly payment on RAP than IBR.
"It's going to range dramatically based on your income," Buchanan said.
There are tools available online to help you determine how much your monthly bill would be under different plans.
Carolina Rodriguez, director of the Education Debt Consumer Assistance Program, said she's working with one partner in a married couple, both with federal student loans, who are facing a nearly $4,000 monthly combined student loan payment under IBR.
"My client said that these payments would mean no extracurricular activities and other opportunities for his children, which might set them back in comparison to their peers," Rodriguez said.
Under SAVE, the family's student loan bill would have been around $2,400, she said.
Borrowers who can't afford to make a monthly payment on their student debt under the current repayment options can pursue deferment and forbearance options.
Those who've taken out loans before July 1, 2027, will maintain access, for example, to the economic hardship deferment and the unemployment deferment, under the new law.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
23 minutes ago
- Yahoo
Alan Dershowitz also said the convicted sex trafficker should be granted immunity to speak about her relationship with Epstein.
Jeffrey Epstein's former lawyer thinks Ghislaine Maxwell should have her 20-year prison sentence commuted—and be given immunity to testify before Congress about the late financier. 'Ghislaine Maxwell is basically serving the sentence that Epstein would have gotten,' lawyer Alan Dershowitz told Newsmax's Sunday Agenda on Sunday. 'She should never be in jail for 20 years. What should happen is, she should be free,' Dershowitz continued. 'She should have her sentence commuted. She should then be called in front of Congress. Have Congress give her total immunity, and then she can tell everything she knows.'
Yahoo
23 minutes ago
- Yahoo
The stock market is being led by a new group of winners
The stock market is being led by a new group of winners originally appeared on TheStreet. For a while, the S&P 500's returns have been dominated by a select group of technology kingpins known as the Magnificent 7. Those seven stocks, Alphabet, Apple, Amazon, Microsoft, Meta Platforms, Nvidia, and Tesla, powered the market higher due to massive spending and demand growth for artificial intelligence training and remain key cogs in the S&P 500's performance, but more recently, a new basket of stocks is delivering big returns, potentially signaling the early days of a regime change. Unlike the Mag 7, the new leaders are far less tied to AI. Sure, names like Palantir and Nvidia remain big winners, but the broader group of stocks delivering eye-popping returns spans more industries, including finance and, yes, even space. Stocks jump on renewed optimism It's been a tale of two markets this year. First, stocks took a drubbing beginning in February when President Donald Trump launched his trade war, instituting 25% tariffs on Canada and White House followed that up with more tariffs, often higher than Wall Street and businesses expected, including a baseline 10% tariff on all imports and a 25% tariff on autos. Altogether, the tariff tit-for-tat took a big toll on stocks, causing the S&P 500 to fall by 19% — nearly into bear market territory — and the Nasdaq Composite to tumble about 24% through early April. Then, everything changed. President Trump paused most reciprocal tariffs on April 9, providing leeway for trade deals that could settle tariffs at more reasonable levels. The glimmer of hope for avoiding a worst-case scenario of high tariffs sparking inflation and sending the economy into a tailspin marked a bottom for stocks, kicking off a record-setting rally. The S&P 500 has marched 24% higher, while the Nasdaq has rallied by over 30% as more people have lowered their forward inflation expectations. While there's some concerning economic data on jobs and the economy, market gains suggest we'll sidestep an economic reckoning, providing upside to revenue and earnings growth. New stock market leaders emerge By now, most investors are familiar with market darlings Nvidia and Palantir, two of the most prominent AI players. Given its dominance in high-end AI semiconductor chips and optimization software, Nvidia is the de facto Goliath in AI network infrastructure. Palantir has become a go-to for securely developing AI apps for government and stocks have been top performers over the past few months, rising 82% and 107% from their early April lows. But other big-cap technology companies haven't performed nearly as well. Alphabet and Apple are up 28% and 23%, respectively. Solid, but not game-changing. You could have bought the Nasdaq 100 and done much better. Instead, a new set of stock market darlings has been outpacing the market, including space technology leader Rocket Lab () and fintech leader SoFi Technologies () . Cryptocurrency leader Coinbase () has also been a star. These three stocks are up 214%, 130%, and 176%, respectively, from their April lows. Moreover, to understand just how good the performance of this new basket of leaders has been, you need look no further than the VanEck Social Sentiment ETF () . The BUZZ ETF invests in "75 large cap U.S. stocks, which exhibit the highest degree of positive investor sentiment and bullish perception based on content aggregated from online sources including social media, news articles, blog posts, and other alternative datasets," according to VanEck. In short, it attempts to keep its finger on the pulse of the most interesting stocks. So far, that strategy is working. The BUZZ ETF gained 36% in the second quarter and is up 22% year-to-date through June. Meanwhile, the S&P 500 is up 11% and 6%. It's up 66% since early April, and month-to-date through July 18, it's gained 8% versus a 2% return for the Nasdaq. More on next-generation stocks:"Look at how poorly the QQQs have done relative to BUZZ since April. Think about this, we consider the QQQs to be the pinnacle of technology stocks, yet they practically look like the healthcare stocks relative to the S&P when compared to BUZZ," wrote long-time technical analyst Helene Meisler on TheStreet Pro. It's not just Rocket Lab, Coinbase, and SoFi powering the ETF, either. Yes, those are the three largest holdings in BUZZ, but AST SpaceMobile and Robinhood () are number four and five, and they've been up 186% and 219% since early April. Nvidia and Palantir are only BUZZ's 10th and 11th biggest holdings, so while their gains are substantial, they're not the ones behind the ETF's significant outperformance. Does the rise of Rocket Lab, thanks to a steady stream of revenue growth from shooting satellites into the sky, or SoFi, which is increasingly disrupting traditional banking, signal the rise of a new guard, or is it just a temporary speculative frenzy? "I was taught that corrections are the market's way of changing leadership," wrote Meisler. "Was the spring plunge the market's way of changing leadership? Or is this just speculation run amok? If you go back to that ratio chart, it's a trend that has been in place for at least a year." Of course, stocks don't go up in a straight line, and some backfilling of gains for this new group of winners is to be expected. Still, one year is a pretty long period for this ETF and its biggest components to outpace the broader market. Todd Campbell owns Rocket Lab, SoFi Technologies, Nvidia, and stock market is being led by a new group of winners first appeared on TheStreet on Jul 20, 2025 This story was originally reported by TheStreet on Jul 20, 2025, where it first appeared. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Los Angeles Times
25 minutes ago
- Los Angeles Times
Off-duty border agent shot in a Manhattan park in apparent botched robbery, police say
NEW YORK — An off-duty U.S. Customs and Border Protection officer was shot in a Manhattan park after an apparent robbery gone wrong, New York City police and federal officials said Sunday. The 42-year-old officer was in stable condition after the Saturday attack and is expected to survive. A spokesperson for the New York Police Department said there was no indication the shooting was politically motivated. The agent, who was not in uniform, was sitting in a park beneath the George Washington Bridge when he was approached by a man riding on the back of a moped, who shot him in the face and arm, police said. The off-duty officer returned fire as the moped sped off. No arrests had been made as of Sunday afternoon, according to a police spokesperson. The Department of Homeland Security shared video online of the two men on a moped, alleging the shooter was caught entering the country illegally in 2023 but released. The NYPD spokesperson said they had no information about the source of that claim. In a social media post Sunday afternoon, President Trump seized on the shooting, alleging it was evidence of Democrats' failures to secure the border. 'The CBP Officer bravely fought off his attacker, despite his wounds, demonstrating enormous Skill and Courage,' he wrote. The shooting comes as federal officials say there has been a surge of attacks on agents carrying out Trump's mass deportation agenda. Enforcement officers involved in the crackdown often cover their faces, which critics say spreads fear and panic across communities and imperils citizens as well as immigrants without legal status. The Trump administration defends masking, which it says is needed to avoid harassment of agents in public and online. On Sunday, the acting director of U.S. Immigrations and Customs Enforcement, Todd Lyons, said he would allow agents to continue covering their faces, which he called a safety measure 'If that's a tool that the men and women of ICE that keeps themselves and their families safe, then I will allow it,' he said.
