SAVE Plan 0% Interest Ends August 1 — What Borrowers Must Do Now

SAVE Plan 0% Interest Ends August 1 — What Borrowers Must Do Now

The countdown is on: the 0% interest benefit under the SAVE plan ends August 1, 2025. If you’re one of the millions of borrowers taking advantage of this temporary relief, now is the time to reassess your repayment strategy — or risk higher interest charges and missed opportunities for forgiveness.

Whether you're a public servant aiming for PSLF or a borrower confused about what happens next, we break down your options so you can act with confidence — not confusion.

What’s Changing August 1?

The SAVE plan’s 0% interest provision was a temporary forbearance tool, but it’s ending. That means:

• Interest will begin accruing again.
• If you stay in SAVE without reviewing your eligibility or switching plans, you may end up paying more long-term.
• Government “auto-enrollment” isn't fully functional yet, so waiting could cost you.

✅ Option 1: Pay Off Your Loans (If You’re Close)

If your loan balance is small and manageable, and you’re not pursuing forgiveness, paying off your balance before interest resumes could save you money.

✅ Option 2: Consider Refinancing

If you’re not going for forgiveness and have good credit/income, refinancing to a lower interest rate might be your smartest move. Check our refinance partner, CampusDoor here.

⚠️ For PSLF-Eligible Borrowers: Update Your Strategy Now

If you work for a government or nonprofit employer — or even a contractor serving one — you may qualify for Public Service Loan Forgiveness (PSLF). But don’t count on the system to auto-enroll you. You must:

1. Refile your PSLF employer certification forms
2. Switch into the right repayment plan: PAYE or IBR, depending on your original loan date
3. Stay proactive — don’t wait for auto-enrollment

Plan Options Based on Loan Origination:

• First loan after July 1, 2014? Enroll in PAYE.
• Loan between Oct 1, 2007 – July 1, 2014? You may still qualify for PAYE or go directly into IBR.
• Loan before 2007? You’ll be eligible for the new IBR or “old” IBR based on your income — the new one caps payments at 10% of discretionary income, versus 15%.

Eventually, everyone in PAYE will be moved into the new IBR by July 2026 — but acting now could keep your payments lower in the short term.

🔍 Not a Public Servant?

You still have choices. If you’ve been paying for years but are not PSLF-eligible:

• Enroll in PAYE or IBR now — it’s still a better deal than waiting.
• Avoid the Repayment Assistance Program (RAP) if possible. RAP extends your repayment timeline to 30 years, adding 5–10 years of extra payments.
• Review refinance options, especially if you're a higher-income borrower.

Don’t Wait for the Government to Choose for You

Federal systems to “auto-enroll” borrowers based on IRS or employer data aren't ready — and won’t be reliable for years. If you do nothing, you might be assigned a plan that doesn’t align with your goals.

Take action now. Don’t risk credit hits or unexpected interest accrual.

Need help figuring it out? Schedule a free consult with LoanSense.