What happened? In July 2024, a federal court paused parts of the SAVE Plan. Because of this, your federal student loans were put into forbearance — meaning you didn't have to make payments, and no interest was accruing.
Federal Loan Interest Rates Increased
However, federal rates skyrocketed in 2024. Loans for undergraduate students issued between July 1, 2024 and June 30, 2025 will have a 6.53% rate, 1.13 percentage points higher than the rate on the same loan type last year.
Borrowers with loans in the SAVE forbearance began seeing those loans accrue interest on Aug. 1, 2025. If you're working toward Public Service Loan Forgiveness, are enrolled in the SAVE Plan, and want to start making qualifying payments, you must apply to switch to a currently available eligible IDR plan.
In June 2024, a federal court blocked parts of the SAVE Plan. As a result, borrowers enrolled had their federal student loans placed in forbearance with a zero percent interest rate.
This pause began as a temporary pandemic measure under the first Trump Administration and was extended through both bipartisan legislation and Administrative action during the Biden Administration.
You can confirm if you're in a forbearance by logging in to your StudentAid.gov account and reviewing your loan details.
Only federal student loans with an outstanding balance as of June 30, 2022, are eligible. Students who are enrolling after June 30, 2022 and who have loans with first disbursements after June 30, 2022 are not eligible for this forgiveness.
Trump's tax and spending package phases out the Income-Contingent Repayment plan, or ICR, and the Pay as You Earn plan, or PAYE, as of July 1, 2028. Starting July 1, 2026, student loan borrowers will have access to another IDR option, the Repayment Assistance Plan, or RAP.
Your student loan servicer(s) will notify you directly after your forgiveness is processed. Make sure to keep your contact information up to date on StudentAid.gov and with your servicer(s).
The "7-year rule" for student loans generally refers to when negative marks, like defaults, are removed from your credit report (around 7 years after the first missed payment or default date for federal loans, 7.5 years for private loans), but the debt itself doesn't disappear and must be paid off; it's also a benchmark in bankruptcy proceedings where federal loans can become dischargeable after 7 years from when payments were due, though proving "undue hardship" is required and difficult.
Borrowers working toward a professional graduate degree (think medicine or law) will have their borrowing capped at $50,000 a year. Parents and caregivers who use parent PLUS loans to help students pay for college will also see new loan limits. They will be capped at $65,000 per child.
If you took out your first student loan: in or before academic year 2006/07, then it will be cancelled when you turn 65 or 30 years after you became eligible to repay, whichever comes first. in or after academic year 2007/08, then it will be cancelled 30 years after you became eligible to repay.
The best way to pay off student loans involves a combination of strategies: pay more than the minimum, use the avalanche method (highest interest first) for savings or snowball method (smallest balance first) for motivation, automate payments to save on interest, consider refinancing for lower rates (federal loans lose benefits), and explore federal income-driven plans (IDRs) or Public Service Loan Forgiveness (PSLF) if eligible. Budgeting, increasing income, and tackling extra payments with bonuses or refunds also significantly speed up repayment.
Then, in June 2023, the court announced its decision: The original Biden forgiveness plan was unconstitutional and couldn't go forward. Although this specific student loan forgiveness plan is no longer an option for millions of borrowers, there are still other ways to obtain student loan forgiveness.
General, or discretionary, forbearance is when your student loan servicer has the discretion to decide whether or not to grant you forbearance. You can request general student loan forbearance if you're temporarily unable to make your payments because you're experiencing certain kinds of financial difficulties.
No, Income-Based Repayment (IBR) isn't going away entirely but is becoming the only remaining traditional income-driven plan after July 1, 2028, with other plans like SAVE (Saving on a Valuable Education) and PAYE (Pay As You Earn) ending, replaced by a new Repayment Assistance Plan (RAP) for new borrowers after July 1, 2026, so existing borrowers with older loans can stay on IBR if they don't take out new loans or consolidate after that date. It's a major shift, making IBR the primary option for those with pre-July 2026 loans who want to keep an older IDR plan, though new borrowers will use RAP.