Honestly, I haven’t kept close tabs on my student loans since the pandemic. Payments were paused in 2020, then my loans got moved to another servicer that told me they were going to restart payments, and then — I guess because I was enrolled in an income-based repayment plan — they went into forbearance when the SAVE plan got held up in court. That was fine with me; I figured I’d tackle them once I paid off my remaining credit-card debt and built up some savings. Now I’m seeing confusing headlines that say student loans that were put into involuntary forbearance might start collecting interest soon — what does that mean? Am I even able to pay them if I wanted to? And what’s this I’m hearing about Trump getting rid of most income-based repayment plans? Are my loans about to become unaffordable? Should I just start prioritizing paying them back over credit-card debt in case interest rates shoot up and I’m stuck with a huge bill?
I’m sorry to say that you’re correct: On August 1, you and nearly 8 million other Americans enrolled in the Biden-era SAVE plan lawyer who specializes in student-debt relief. “So you don’t need to start paying, but your total balance is about to start growing,” she explains.
That doesn’t mean it’s going to balloon, though. “Most federal student loans have an interest rate somewhere between 6 percent and 9 percent, which is much lower than most consumer debt,” says Kaplan. “It also does not compound like credit-card debt debt does, so it grows more slowly.” (For example, if your student loan was $1,000 and your interest was 9 percent, your interest would add up to about $90 a year; you can suss out your own numbers using a student-loan calculator.) These dollars are nothing to sniff at, of course, but you definitely shouldn’t prioritize them over credit-card debt.
In other words, your first option is to do nothing. Yes, your loan balance will increase, but it won’t snowball. Take advantage of this forbearance period — however long it lasts — to get higher-interest debt off your plate so that you’ll be in a better position to take on your monthly student-loan bills when they restart.
Your second option is to keep paying down your debt without choosing a new payment plan. “You can still make payments through your loan servicer while you’re in forbearance,” says Kaplan. “It won’t affect your forbearance status.” She says that many of her clients have done so when they’ve gotten a bonus or a tax refund. The upside is that you can pay on your own terms, when you feel like it, without being tied to a monthly bill. The downside is that if you’re working toward forgiveness — say, you’re enrolled in the Public Service Loan Forgiveness program and the remaining balance of your debt will be wiped out once you make a certain number of qualifying payments — these unscheduled payments probably won’t be counted toward the total.
Your third option is to ditch SAVE for a new repayment plan. You will almost certainly need to do this at some point anyway; a ruling on SAVE could happen at any time, and no one is optimistic about its future. If (or more likely when) it is deemed unconstitutional, you and the millions of other SAVE plan-holders will be scrambling for the next-best option. And if you don’t, you’ll be shunted into the standard repayment plan, which typically has much higher (and often unaffordable) monthly bills, says Persis Yu, the deputy executive director and managing counsel of the Student Borrower Protection Center. “You might as well start researching the income-driven repayment plans that are available now, especially since it could take several months for your application to go through,” she says.
Unfortunately for you and many other borrowers, you’re not going to find another payment plan as affordable as SAVE. But there are still many income-driven repayment plans available, says Yu. She recommends starting with the Department of Education’s website, which also has tools that show you what your monthly payment will be.
Finally, if adding another monthly bill to your roster is a nonstarter for you, you may have one more option: qualifying circumstances — for instance, you’ll need to show that you’re dealing with economic hardship or unemployment.
To answer your question about the Trump administration getting rid of income-driven repayment plans: “That is partly true, but only for new borrowers taking out loans after July 1, 2026,” says Kaplan. “Under the new reconciliation bill, if you have an existing student loan — as anyone in the SAVE plan does — you will still have access to income-driven repayment plans, at least for now.” The new bill does Rae Kaplan’s law firm.
A previous version of this post miscalculated the amount of interest you would owe on a loan with a 9 percent interest rate.
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