US Secretary of Education Linda McMahon announced on Wednesday that the department is ending a Biden-era zero-interest student loan policy.
“Today, the U.S. Department of Education announced it will take an additional step to bring fiscal responsibility to the federal student loan portfolio by restarting interest accrual for borrowers with loans in the illegal Saving on a Valuable Education (SAVE) Plan on August 1, 2025,” a press release from the department asserted.
“The Department will take this action to comply with a federal court injunction that has blocked implementation of the SAVE Plan, including the Department’s action to put SAVE borrowers in a zero percent interest rate status,” the agency added.
“Millions of borrowers enrolled in the Biden Administration’s SAVE Plan based on the false promise of loan cancellation and zero monthly payments, despite multiple federal courts striking down such policies. The Biden Administration also invented a zero percent “litigation forbearance,” forcing taxpayers to foot the bill and leaving borrowers without clear direction on how to legally repay their loans,” they continued.
.@usedgov is ending the Biden Administration’s illegal zero-interest student loan policy for SAVE borrowers on August 1.
— Secretary Linda McMahon (@EDSecMcMahon) July 9, 2025
We will support borrowers in selecting a legal repayment plan that best fits their needs.
Visit https://t.co/jzxyqF5Ikn for more information.…
As part of a federal court injunction, borrowers in the illegal SAVE Plan will begin accruing interest on August 1.
— U.S. Department of Education (@usedgov) July 9, 2025
The Trump Administration will support SAVE borrowers in selecting legal repayment plans that fit their needs & protect American taxpayers. https://t.co/EVF0x4ByMX pic.twitter.com/kHu4SSVrOJ
“For years, the Biden Administration used so-called ‘loan forgiveness’ promises to win votes, but federal courts repeatedly ruled that those actions were unlawful. Congress designed these programs to ensure that borrowers repay their loans, yet the Biden Administration tried to illegally force taxpayers to foot the bill instead,” McMahon said.
“Since day one of the Trump Administration, we’ve focused on strengthening the student loan portfolio and simplifying repayment to better serve borrowers. As part of this effort, 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. Borrowers in SAVE cannot access important loan benefits and cannot make progress toward loan discharge programs authorized by Congress,” she added.
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