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Student loan payments could double or triple starting July 1 as Trump administration phases out SAVE plan
The Trump administration is phasing out the popular SAVE student loan repayment plan, meaning hundreds of thousands of borrowers will need to choose a new payment option by July 1. Monthly payments could jump from around $200 to $700 for many.
The Trump administration is phasing out the popular SAVE student loan repayment plan, a move that will force hundreds of thousands of borrowers to select a new payment option starting July 1. The SAVE plan, which allowed moderate to low-income borrowers to set their monthly payments based on family income, had become one of the most widely used repayment programmes in the country.
According to Nicholas Purwitt, assistant provost and executive director of financial aid at Stony Brook University, a borrower earning approximately $65,000 per year currently pays between $150 and $200 per month under the SAVE plan. Without it, that figure could double or even triple to around $700 under the standard repayment plan.
Borrowers who take no action by the July deadline risk being automatically placed into the standard repayment plan, which does not account for income level. Several alternative income-driven repayment plans remain available, though none offer the same level of affordability as SAVE provided for lower-income earners.
The change comes at a particularly difficult time for many Americans already struggling with rising costs. University officials report hearing from increasing numbers of students concerned about housing costs, transportation expenses, and child care, with student loan payments representing an additional financial burden many cannot afford.
Financial aid advisors are urging borrowers to review their options before the July 1 deadline to avoid the most severe payment increases. The phase-out of SAVE affects borrowers across the country, with particularly significant impact on Long Island and the greater New York metropolitan area where cost of living compounds the challenge of higher monthly loan payments, as reported by News 12 New York.