Student Loan Payments to Increase with SAVE Plan Struck Down
The Biden administration's Saving on a Valuable Education (SAVE) plan, which offered relief to millions of federal student loan borrowers, has been struck down. This change will likely impact monthly payments for those enrolled.
Impact on Borrowers
Experts like Elaine Rubin from Edvisors anticipate higher monthly payments. Although the payment pause might extend until December or even mid-2026, borrowers should prepare for increased costs.
Alternative Repayment Options
With SAVE off the table, borrowers must explore other repayment plans. Options include:
- Income-Based Repayment
- Pay As You Earn
- Income-Contingent Repayment
Adam Minsky, a student loan lawyer, notes that these plans may result in higher payments compared to SAVE.
Payment Increase Scenarios
The increase varies based on individual circumstances. For example:
A single filer earning $60,000 with a $30,000 loan at 6.53% interest might see payments rise from $70 to $370 monthly compared to the SAVE plan's $217.
While some options could lower monthly payments, the total repayment amount could significantly increase over the loan's lifetime. Therefore, careful consideration of all available options is crucial.
