Student loan payments could spike for Long Island borrowers starting July 1
Starting July 1, borrowers enrolled in the popular SAVE program will need to choose a new repayment option or risk being automatically placed into a standard repayment plan that could come with significantly higher monthly bills.
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Hundreds of thousands of Long Island student loan borrowers could soon see a major increase in their monthly payments as the Trump administration phases out the popular SAVE repayment plan.
Starting July 1, borrowers enrolled in the popular SAVE program will need to choose a new repayment option or risk being automatically placed into a standard repayment plan that could come with significantly higher monthly bills.
“With the end of that, what we’re going to see is student loan bills really go up each month,” said Nicholas Prewett, assistant provost and executive director of financial aid and scholarship services at Stony Brook University.
Prewett says the SAVE plan helped moderate- and low-income borrowers by basing payments on family income levels.
But now, many borrowers are bracing for higher costs at a time when expenses are already straining budgets.
“We’re hearing from a lot of students that are really concerned about housing costs, transportation costs, child care, and the student loans are really the last thing that they really want to worry about,” Prewett said.
According to Prewett, a borrower making about $65,000 a year currently pays between $150 and $200 a month under SAVE. Starting in July, those payments could double or even triple reaching as much as $700 a month under the standard repayment plan.
“That’s if they go into the standard repayment plan,” Prewett explained. “There are a few different repayment plans for them to choose from. But if they take no action, they could see a definite increase in their monthly student loan payment.”
He recommends borrowers review their repayment options before July 1 to avoid being automatically enrolled in a more expensive plan.
