Borrowers may face doubled student loan bills as Biden-era relief comes to an end.

As the Biden-era relief measure for federal student loan borrowers nears its conclusion, many individuals could see their monthly payments more than double. Earlier this month, the Trump administration announced that the SAVE plan, which provided an interest-free payment pause, would expire on August 1. Once this happens, borrowers who do not make sufficient payments to cover accruing interest will start to see their education debts grow again. Under the SAVE plan, borrowers were placed into forbearance while legal challenges against the program unfolded.

However, with the SAVE plan essentially becoming defunct, interest charges will resume from next month. For those looking to transition to another repayment plan, monthly costs are expected to rise significantly. Scott Buchanan, executive director of the Student Loan Servicing Alliance, noted that the SAVE plan was exceptionally favorable. Approximately 7.7 million federal student borrowers were enrolled in this plan, which has now concluded.

Education Secretary Linda McMahon has advised borrowers to promptly switch to a legally compliant repayment plan, such as the Income-Based Repayment Plan (IBR). Buchanan indicated that for many, IBR would likely be the best option moving forward. However, borrowers may experience a drastic increase in monthly payments with IBR, which calculates payments based on 10% of discretionary income, and can rise to 15% for older loan borrowers. Many federal borrowers may find it challenging to afford payments under this framework.

Some may be forced to relocate or risk default. Legislation passed by Republicans will introduce a new income-driven repayment option called the Repayment Assistance Plan (RAP) by July 1, 2026, but it is unclear whether this will offer more affordable payments than IBR. Financial assistance tools are available to help borrowers estimate potential payments under different plans. For those unable to meet their monthly responsibilities, options like deferment and forbearance are still available for loans taken out before July 1, 2027.