It looks like time has run out for the nearly 8 million student loan borrowers enrolled in SAVE. The US Department of Education announced that loans will resume accruing interest on Aug. 1.

Borrowers enrolled in the Saving on a Valuable Education Plan, a product of the Biden administration, have been in limbo since June 2024 when the plan was challenged by Republican opponents and later struck down by a federal court. Since then, borrowers have had their loans placed in forbearance, with payments on pause and interest rates left at 0%.

Payments are still on pause while borrowers remain in a general forbearance, but interest will start accruing again — although not retroactively, the department noted.

The Education Department said it will begin reaching out to borrowers starting July 10 to select a new repayment plan. Loan consolidation and income-based repayment applications are available.

“The Department urges all borrowers in the SAVE Plan to quickly transition to a legally compliant repayment plan — such as the Income-Based Repayment Plan,” Secretary of Education Linda McMahon said in a statement.

The process could be complicated further for borrowers since the passage of the so-called “Big Beautiful Bill” earlier this month, which reduces repayment plan options. While the new Repayment Assistance Plan, introduced in the legislation, won’t be available until July 2026, you can move to another available income-driven repayment plan or standard repayment plan.

The Department of Education’s website previously stated that SAVE borrowers will stay in a general forbearance until at least September. It also directed loan servicers to adjust the income recertification deadline to no earlier than Feb. 1, 2026. 

We recommend you start investigating other available income-driven repayment plans — you can use the department’s loan simulator to find out how much your payment could be. However, you aren’t required to start making payments or choose a repayment plan on Aug. 1, although your loans will start accruing interest at that point. Borrowers enrolled in the Public Service Loan Forgiveness program who have already reached their 120-required on-time payments and are waiting for their forgiveness or PSLF buy-back application to get approved can either continue to ride out the forbearance period or switch to IBR said Betsy Mayotte, president and founder of the Institute of Student Loan Advisors.