The One Big Beautiful Bill Act causes significant changes to the federal student loan system, impacting nearly 43 million borrowers. It ends the Biden-era SAVE repayment plan, which offered low payments and expedited loan forgiveness, amid legal challenges that deemed it too generous. As of Aug. 1, borrowers previously enrolled in SAVE will be subject to interest accrual, although payments are not yet required. Many borrowers may seek alternative plans due to these changes, with concerns about last-minute announcements potentially causing issues for those affected.
"The most generous repayment plan is the Biden-era Saving on a Valuable Education (SAVE) plan, but it is so generous that Republicans have successfully argued in court that it is too generous."
"For all practical purposes, I would say SAVE is just kind of dead at this point, even if it's technically on life support," said Preston Cooper at AEI.
"On Aug. 1, SAVE borrowers will, once again, see their balances grow with interest. Because the SAVE plan is still enjoined, borrowers won't yet be required to make payments."
"Roxanne Garza, director of higher education policy at EdTrust, worries that the relatively last-minute announcement about interest accrual will cause problems for borrowers."
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