Student Loan Debtors Face Dual Pressure as Biden’s SAVE Plan Ends and Trump’s RAP Looms

Millions of student loan borrowers are bracing for a financial squeeze as the Biden administration's SAVE plan concludes its interest freeze on August 1. The program, which shielded enrollees from accruing interest for over a year, had covered nearly 7.7 million debtors with payments capped at 5% of discretionary income. Now, balances will resume growing for those unable to meet monthly obligations.

The Department of Education is urging borrowers to transition to Income-Based Repayment (IBR) plans, which Education Secretary Linda McMahon emphasized as the legally compliant alternative. "SAVE was incredibly generous," noted Student Loan Servicing Alliance director Scott Buchanan, acknowledging the plan's unusual borrower protections during its active period.

Meanwhile, former President Trump's proposed RAP program offers no immediate relief, with implementation not expected until 2026 at the earliest. This leaves borrowers navigating a payment cliff without substantive policy solutions in the interim.