The U.S. Education Department directed its federal student loan servicers to restart interest accrual on Aug. 1 for participants in the Biden-era SAVE plan. (Catherine Lane/Getty Images)

WASHINGTON — Interest accrual on the debt of nearly 7.7 million student loan borrowers enrolled in the Saving on a Valuable Education plan will resume Aug. 1, the U.S. Education Department said Wednesday.

The Biden-era income-driven repayment plan better known as SAVE saw legal challenges from several GOP-led states beginning in 2024, creating uncertainty for borrowers who were placed in an interest-free forbearance amid that legal limbo.

The SAVE plan, created in 2023, aimed to provide lower monthly loan payments for borrowers and forgive remaining debt after a certain period of time.

In February, a federal appeals court upheld a lower court injunction that blocked the SAVE plan from going into effect. The department said Wednesday that it’s instructing its federal student loan servicers to start charging interest Aug. 1 to comply with court orders.

When the SAVE plan forbearance ends, “borrowers will be responsible for making monthly payments that include any accrued interest as well as their principal amounts,” the department said in a written announcement.

“For years, the Biden Administration used so-called ‘loan forgiveness’ promises to win votes, but federal courts repeatedly ruled that those actions were unlawful,” Education Secretary Linda McMahon said in a statement alongside the announcement.

“Congress designed these programs to ensure that borrowers repay their loans, yet the Biden Administration tried to illegally force taxpayers to foot the bill instead,” she added.

McMahon said her department is urging borrowers under the SAVE plan to “quickly transition to a legally compliant repayment plan.”

“Borrowers in SAVE cannot access important loan benefits and cannot make progress toward loan discharge programs authorized by Congress,” she said.

‘Unnecessary interest charges’

Mike Pierce, executive director of the Student Borrower Protection Center, blasted the department’s decision in a statement Wednesday.

“Instead of fixing the broken student loan system, Secretary McMahon is choosing to drown millions of people in unnecessary interest charges and blaming unrelated court cases for her own mismanagement,” he said.

“Every day, we hear from borrowers waiting on hold with their servicer for hours, begging the government to let them out of this forbearance, and help them get back on track — instead, McMahon is choosing to jack up the cost of their student debt without giving them a way out.”

The agency has taken heat for its sweeping actions in the months since President Donald Trump took office as he and his administration look to dismantle the department.

The department is also mired in a legal challenge over some of its most significant efforts so far, including laying off more than 1,300 employees earlier this year as part of a reduction in force effort, an executive order calling on McMahon to facilitate the closure of her own agency and Trump’s proposal to transfer some services to other federal agencies. These actions have been temporarily halted in court.

Meanwhile, President Donald Trump signed a massive tax and spending cut bill into law last week, part of which forces any borrower under the SAVE plan to opt in to a different repayment plan by July 1, 2028, or be automatically placed in a new, income-based repayment plan. 

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We’ve learned a bit about American society amid the rhetoric over President Donald Trump’s “big beautiful bill.” For example, unauthorized immigrants don’t get Medicaid, but millions of working-age adults have gone on it. We’ve also knocked down some false claims about the bill along the way.

As of July 3, the nearly 900-page measure, filled with tax breaks and spending cuts, had moved toward passage but was still being debated in Congress.

Wisconsin Watch fact briefs have cleared up misstatements about the bill itself and about programs it would cut, such as Medicaid and food stamps.

Note: Our fact briefs answer a factual question yes or no based on the facts available when the brief is published.

Here’s a look.

Would the ‘big beautiful bill’ provide the largest federal spending cut in US history?

No.

The largest-cut claim was made by Republican U.S. Rep. Scott Fitzgerald, who represents part of southeastern Wisconsin. His office cited a $1.7 trillion claim made by the Trump administration.

Even if the net cut were $1.7 trillion, it would be second to a 2011 law that decreased spending by $2 trillion and would be the third-largest cut as a percentage of gross domestic product, according to the Committee for a Responsible Federal Budget.

But when Fitzgerald made his statement, the bill’s net decreases were $1.2 trillion, after taking its spending increases into account, and $680 billion after additional interest payments on the debt.

Have millions of nondisabled, working-age adults been added to Medicaid?

Yes.

Millions of nondisabled working-age adults have enrolled in Medicaid since the Affordable Care Act expanded eligibility in 2014.

Medicaid is health insurance for low-income people.

The nonpartisan Congressional Budget Office estimated that in 2024, average monthly Medicaid enrollment included 34 million nonelderly, nondisabled adults — 15 million made eligible by Obamacare.

Republican U.S. Rep. Tom Tiffany, who represents most of northern Wisconsin, complained about “able-bodied” adults being added, saying they are “draining” Medicaid.

The nonpartisan health policy organization KFF said 44% of the working-age adults on Medicaid, some of whom are temporarily disabled, worked full time and 20% part time, many for small companies, and aren’t eligible for health insurance.

Are unauthorized immigrants eligible for federal Medicaid coverage?

No.

Unauthorized immigrants are not eligible for traditional, federally funded Medicaid and have never been eligible.

Fourteen states, excluding Wisconsin, use state Medicaid funds to cover unauthorized immigrants. 

Trump’s bill proposed reducing federal Medicaid funds to those states.

Opponents of the bill, including Democratic U.S. Rep. Mark Pocan, who represents the Madison area, said Trump administration officials claimed that unauthorized immigrants receive traditional Medicaid.

Do half the residents in one rural Wisconsin county receive food stamps?

Yes.

In April, 2,004 residents of Menominee County in northeast Wisconsin received benefits from the federal Supplemental Nutrition Assistance Program (SNAP).

That’s about 46% of the county’s 4,300 residents.

SNAP, formerly known as food stamps and called FoodShare in Wisconsin, provides food assistance for low-income people.

Menominee County’s rate was cited by U.S. Sen. Raphael Warnock, D-Ga., at the Wisconsin Democratic Party convention. He commented on the bill’s provision to remove an estimated 3.2 million people from SNAP, according to the nonpartisan Congressional Budget Office.

Is Donald Trump’s megabill projected to add more than $2 trillion to the national debt?

Yes.

Nonpartisan analysts estimate that the “big beautiful bill” would add at least $2 trillion to the national debt over 10 years.

The debt, which is the accumulation of annual spending that exceeds revenues, is $36 trillion.

U.S. Rep. Gwen Moore, D-Milwaukee, and U.S. Sen. Ron Johnson, R-Wis., claimed the bill would add trillions.

Among other things, the bill would make 2017 individual income tax cuts permanent, add work requirements for Medicaid and food assistance, and add funding for defense and more deportations.

After we published this brief, the Senate passed a version of the bill that would increase the debt by $3.3 trillion.

Would ‘the vast majority’ of Americans get a 65% tax increase if the GOP megabill doesn’t become law?

No.

Most Americans would not face a tax increase near 65% if Trump’s 2017 tax cuts are not extended under the bill.

The tax cuts are set to expire Dec. 31. 

The Tax Foundation estimates that if the cuts expire, 62% of taxpayers would see a tax increase in 2026. The average taxpayer’s increase would be 19.4% ($2,955).

GOP U.S. Rep. Derrick Van Orden, who represents western Wisconsin, made the 65% claim. 

Do you have questions about this bill and how it affects Wisconsin? Submit them here, through our Ask Wisconsin Watch project.

Here are 6 claims about Donald Trump’s big bill — and the facts is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

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Nonpartisan analysts estimate that President Donald Trump’s megabill would add at least $2 trillion to the national debt over 10 years.

The Congressional Budget Office’s preliminary estimate says the tax-and-spending bill now in Congress will add $2.3 trillion.

Other estimates are higher: Tax Foundation: $2.56 trillion; University of Pennsylvania’s Penn Wharton Budget Model: $2.79 trillion; Committee for a Responsible Federal Budget: $3.1 trillion, including interest payments.

Some estimates under $2 trillion account for projected economic growth, while other estimates over $5 trillion note some provisions in the bill are temporary and will likely be extended.

The debt, which is the accumulation of annual spending that exceeds revenues, is $36 trillion.

U.S. Rep. Gwen Moore, D-Milwaukee, and U.S. Sen. Ron Johnson, R-Wis., claimed the bill would add trillions.

Among other things, the bill would make 2017 individual income tax cuts permanent, add work requirements for Medicaid and food assistance, and add funding for defense and more deportations.

This fact brief is responsive to conversations such as this one.

Sources

• The Hill: GOP beats down key budget office over tax plan projections
• Committee for a Responsible Federal Budget: CBO's First Score of House Reconciliation Bill
• Tax Foundation: “Big Beautiful Bill” House GOP Tax Plan: Preliminary Details and Analysis
• Penn Wharton Budget Model: The House-Passed Reconciliation Bill: Illustrative Budget, Economic, and Distributional Effects with Permanence
• Committee for a Responsible Federal Budget: Breaking Down the One Big Beautiful Bill
• Wisconsin Watch: Did the US debt increase by $7.8 trillion during Donald Trump’s presidency?
• U.S. Treasury Department: Debt to the Penny
• U.S. Rep. Gwen Moore: Congresswoman Moore Slams Republican Cuts to Health Care to Pay for Tax Giveaways for the Wealthy
• PBS Wisconsin: Ron Johnson says Trump can't bully him off his deficit-reducing demands for a federal budget bill
• Associated Press: Trump’s ‘beautiful’ bill spans more than 1,000 pages. Here’s what’s inside it

Is Donald Trump’s megabill projected to add more than $2 trillion to the national debt? is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.