Starting Friday, federal student loans under the SAVE (“Saving on a Valuable Education”) repayment plan will begin accruing interest again. This affects approximately 7.7 million to 8 million borrowers, said federal stats — interest had been paused during ongoing legal action.
Advocacy group estimates suggest this will cost the typical borrower around $3,500 per year in interest, which breaks down to about $300 extra per month on average, according to the Education Department.
Courts invalidated key provisions of the SAVE program, including the zero‑interest feature. A court injunction requires loan servicers to begin charging interest again starting Friday.
The U.S. federal government suspended interest on student loans—and paused payments and collections—primarily due to the COVID‑19 emergency.