Student loan interest resumes today for SAVE plan borrowers. Here’s what to do next.

Starting today — Aug. 1 — interest will begin accruing again on federal student loans for nearly 500,000 borrowers in Pennsylvania, New Jersey, and Delaware who are enrolled in the now-paused SAVE repayment plan.

The Saving on a Valuable Education (SAVE) plan — an income-driven repayment program rolled out by the Biden administration — was blocked by federal courts last July and placed under an injunction.

Since then, borrowers have been in forbearance: They aren’t required to make payments, they don’t earn credit toward loan forgiveness or Public Service Loan Forgiveness (PSLF), and until now, their loans hadn’t accrued interest. But they also won’t go into default.

» READ MORE: Here are your student loan repayment options as debt collection and interest accrual resume

That leaves borrowers with a difficult choice: Stay in the SAVE plan without needing to pay but your loan interest grows, or switch to another repayment plan to resume payments and begin working toward debt forgiveness.

The future of the SAVE repayment plan remains uncertain — and there’s a real possibility it won’t survive the ongoing court challenges, said Kristin McGuire, executive director of the youth advocacy nonprofit Young Invincibles.

“If people are feeling frustrated, which I know they are, they aren’t alone. It is not any fault of their own. Millions of borrowers were relying on the affordability of the SAVE plan,” McGuire said.

While interest will now accrue on loans in the SAVE plan, borrowers aren’t required to make payments during the court-ordered forbearance. But that doesn’t mean you can’t make payments if you’re able.

“Borrowers can make voluntary payments while enrolled in the SAVE forbearance,” said Aissa Canchola Bañez, senior policy advisor at the Student Borrower Protection Center. “But borrowers should note that these payments will not count toward Public Service Loan Forgiveness (PSLF) or IDR cancellation.”

If you’re considering making a voluntary payment, contact your loan servicer to ask how much you’d need to pay to cover your monthly interest or to make a full payment toward principal and interest.

Whether the SAVE plan survives or not, borrowers who remain in the plan without making payments will likely face a growing loan balance.

The U.S. Department of Education says that once the SAVE forbearance ends, “borrowers will be responsible for making monthly payments that include any accrued interest as well as their principal amounts.”

“For borrowers that simply cannot afford to make payments, remaining on the SAVE forbearance for as long as possible — even while interest accrues — and putting aside some savings to prepare for higher payments may be the smartest option,” Canchola Bañez said.

There are other income-driven repayment (IDR) plans, similar to SAVE, that will offer lower monthly payments with the possibility of loan forgiveness after 20 to 25 years of repayment.

None of the time spent in SAVE’s forbearance will be counted toward debt forgiveness. If that’s a priority for you, then you should switch plans, Bañez and McGuire said.

Use the Loan Simulator tool on studentaid.gov to compare available plans and get estimates of monthly payments.

Pay As You Earn (PAYE):

Income-Based Repayment (IBR):

Income-Contingent Repayment (ICR):

The Inquirer has a guide on the different IDR plans, Public Service Loan Forgiveness, and national and local resources.

Another helpful resource is to contact your student loan servicer.

You can switch IDR plans by using the online IDR application, the same one used to sign up for the SAVE plan. Visit studentaid.gov/idr to get started.

As a borrower already enrolled in an IDR plan, choose the option for “Returning IDR Borrowers.” Here, you will take about 10 minutes to fill out the application and switch plans toward the end of the form.

You’ll need this information to complete the form:

You can also submit a Repayment Plan Request to your loan servicer through the mail, however, it’s not as simple or fast as the online application.

There’s currently a backlog of about 1 million income-driven repayment (IDR) applications, so switching to a new plan won’t happen right away — and there’s no clear timeline for how long it may take, Canchola Bañez said.

After submitting your IDR application, call your loan servicer and ask to be placed into a “processing forbearance” while your new plan is being reviewed.

“Unfortunately, many borrowers are reporting very long call wait times, and misinformation from their servicer,” Canchola Bañez said.

If you encounter issues, she recommends contacting your members of Congress by opening a constituent case with your U.S. representative or senator. You’ll be asked to describe the problem you’re experiencing with the U.S. Department of Education or your loan servicer. The Student Borrower Protection Center has a step-by-step guide to filing a case on its website.