The U.S. Department of Education announced it will restart interest accrual for student-loan borrowers in the Saving on Valuable Education (SAVE) plan, starting from Aug. 1, according to a July 9 Education Department (ED) statement.
Launched in 2023 by the Biden administration, the SAVE plan calculated student loan payments based on the individual’s income and family size. The plan prevents interest from getting accrued, brings loan payments for those who earn less than $32,800 annually to zero per month, while providing early forgiveness for low-balance borrowers.
In June last year, a federal court blocked parts of the SAVE plan. As a result, student loan borrowers enrolled in the plan had their loans put in forbearance with a zero percent interest rate. The SAVE plan was struck down as illegal by the Eighth Circuit Court of Appeals in February….