Roughly 8 million student loan borrowers will see their interest charges restart next month, the Department of Education announced Wednesday.
Borrowers on the Biden-era Saving on a Valuable Education Plan — about 7.7 million people — will have interest charges return on Aug. 1 after a yearlong pause on payments. The return to interest charges was first reported by Bloomberg.
“For years, the Biden Administration used so-called ‘loan forgiveness’ promises to win votes, but federal courts repeatedly ruled that those actions were unlawful,” Secretary of Education Linda McMahon wrote in a statement released by the department Wednesday. “Since day one of the Trump Administration, we’ve focused on strengthening the student loan portfolio and simplifying repayment to better serve borrowers.”
The education department said it’s complying with a federal court injunction that blocked implementation of the SAVE Plan earlier this year. But education advocates told ABC News that this move is expected to severely impact those millions of borrowers on SAVE who could potentially enter into more debt as interest accrues in the coming weeks.
Student Borrower Protection Center Executive Director Mike Pierce called the move by the Trump administration a “betrayal” and blasted Secretary of Education Linda McMahon.
“Instead of fixing the broken student loan system, Secretary McMahon is choosing to drown millions of people in unnecessary interest charges and blaming unrelated court cases for her own mismanagement,” Pierce wrote in a statement to ABC News.
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Author: Dillon B
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