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President Donald Trump’s “big beautiful bill” includes a new savings plan for children with a one-time deposit of $1,000 from the federal government for newborns.
So-called “Trump accounts” will function like an individual retirement account.
But beyond the initial seed money, tax experts say the benefits fall short of other savings plans already out there.

President Donald Trump’s massive tax and spending package includes a new child savings account with a one-time deposit of $1,000 from the federal government for newborns.
The premise is simple: So-called “Trump accounts,” a type of tax-advantaged savings account, will be available to all children who are U.S. citizens starting in July 2026. 

Beyond that, the rules get somewhat confusing, tax experts say.

Funding a Trump account

Under Trump’s “big beautiful bill,” children born in 2025 through 2028 will also receive a $1,000 deposit each in their Trump account, funded by the Department of the Treasury. There are no income requirements.
Parents and others will be able to contribute up to $5,000 a year in after-tax dollars up until the year before the beneficiary turns 18. Employers could also contribute up to $2,500 to an employee’s account, which wouldn’t be counted as income to the recipient. Both caps will be indexed to inflation.
The balance will be invested in a low-cost fund that tracks a U.S. stock index.
From a tax perspective, the accounts would function like an individual retirement account. Earnings grow tax-deferred, and qualified withdrawals are generally taxed as ordinary income.

Tapping the money in a Trump account

Here’s where it starts to get tricky. Trump account funds may not be easily accessed for decades.
Money in a Trump account generally can’t be withdrawn before the beneficiary turns 18. After that, “it turns into a traditional IRA,” said Ben Henry-Moreland, a certified financial planner with advisor platform Kitces.com.
Because the final version adheres to IRA rules, savers would pay a 10% tax penalty on withdrawals before age 59½.
In earlier versions of both the House and Senate bill, withdrawals could begin at age 18, at which point account holders would have been able to tap the funds for education expenses or college alternative programs, the down payment on a first home or as capital to start a small business.
“The IRA distribution rules requiring owners to wait until they reach age 59½ to make penalty-free withdrawals would presumably still be in effect,” according to Henry-Moreland’s analysis of the legislation.
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There are ways to avoid the IRA early withdrawal penalty for those under 59½, including if the funds are used to pay for qualifying higher-education expenses or first-time home purchases, as well as for emergency expenses, among certain other exceptions.
However, since Trump accounts include a mix of after-tax contributions, initial seed money and investment income, distributions are still partially taxable. That means there are fewer tax planning opportunities compared with traditional and Roth IRAs, where there’s either a tax break on contributions or on withdrawals. Trump accounts have neither.
“It seems like this is a good idea, complicated with unfavorable tax characteristics,” said Zach Teutsch, a managing partner at Values Added Financial in Washington, D.C.
For example, “in a Roth account, you don’t have to pay tax on the income or the gains, and that just seems better,” he said.
Experts say that additional details on the tax treatment of distributions will need further clarification from the Treasury Department or Internal Revenue Service.

‘A retirement account for children’

Westend61 | Westend61 | Getty Images

“This is really a retirement account for children,” Henry-Moreland said. “It’s a way to put money in an account at a young age that gets saved but doesn’t have the earned income requirement that a traditional or Roth IRA would have.”
But because Trump accounts are also restricted to stock funds, that means that savers won’t be able to benefit from rebalancing with less risky fixed-income options, such as bonds or cash.
After age 18, the “eligible investment” rules may no longer apply and the beneficiary can invest the funds in any way allowed within an IRA, according to Henry-Moreland.

Republican lawmakers have said Trump accounts will introduce more Americans to wealth-building opportunities, particularly by investing in the stock market.
Sen. Ted Cruz, R-Texas, who spearheaded the effort, said in a May “Squawk Box” interview that the accounts give children “the miracle of the compound growth, the ability to accumulate wealth, which is transformational.”

‘A nice big check’

A $1,000 initial deposit boosts the attractiveness of these accounts, too.
Although some states, including Connecticut and Colorado, already offer a type of “baby bonds” program for parents, most tax professionals agree that the biggest benefit of Trump accounts is the seed money for children born from Jan. 1, 2025, through Dec. 31, 2028.
“There’s going to be a nice big check coming into the account,” said Evan Morgan, a certified public accountant and tax principal at Kaufman Rossin, in Fort Lauderdale, Florida.
Just as advisors recommend deferring enough into a 401(k) plan to benefit from your employer’s full 401(k) matching contribution, there is no reason to pass this up.
“If the government is giving you free money, you should take it,” said Teutsch.

An alternative to a Trump account

Otherwise, most experts say a 529 college savings plan is a better alternative for families because of the higher contribution limits and tax advantages. 
This year, individuals can gift up to $19,000 to a 529, or up to $38,000 if you’re married and file taxes jointly, per child without those contributions counting toward your lifetime gift tax exemption.
Generally, 529 plans offer age-based portfolios, which start off with more equity exposure early on in a child’s life and then become more conservative as college nears. By the time high school graduation is around the corner, families likely have very little invested in stocks and more in investments like bonds and cash. That can help blunt their losses.
“At least in a 529 plan you have more flexibility on what to invest in,” Morgan said.

Although there are limitations on what 529 funds can be used for beyond higher-education costs, restrictions have loosened in recent years to include continuing education classes, apprenticeship programs and student loan payments. Withdrawals from 529s for nonqualified expenses can be subject to tax and a 10% penalty.
Also, as of 2024, families can roll over unused 529 funds to the account beneficiary’s Roth IRA without triggering income taxes or penalties, so long as they meet certain requirements.
“If you were looking at this compared to a 529, I would almost pick a 529 every time,” Henry-Moreland said.

In some cases, wealthier families could benefit from fully funding a 529 plan and then putting additional funds in a Trump account, as a way to get a jump start on retirement savings without having to satisfy the earned income component of a traditional IRA or Roth, according to Teutsch.
However, “most Americans don’t even put one dollar into 529 plans, let alone maxing them out,” he said.
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The Trump administration’s overhaul to the federal student loan system may leave borrowers without an affordable option to repay their loans, advocates say.
The SAVE, or Saving on a Valuable Education, plan, touted by the Biden administration as the most affordable repayment program ever, is now defunct.
President Donald Trump’s “one big beautiful bill” phases out several other income-driven repayment plans, which were aimed at making payments manageable for student loan holders.

Nathan Howard | Reuters

As the Trump administration overhauls the federal student loan repayment system, borrowers may soon find it difficult to keep up with their monthly payments, consumer advocates said.
The SAVE, or Saving on a Valuable Education, plan, touted by the Biden administration as the most affordable repayment program ever, is now defunct. President Donald Trump’s “big beautiful bill” phases out several other income-driven repayment plans, which were aimed at making payments manageable for student loan holders.

“In many instances, borrowers will be left with no affordable options, increasing the risk of default,” said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York City.
Here are the biggest changes to federal student loan repayment under Trump, so far.

SAVE plan is defunct

The Biden administration rolled out the SAVE plan in summer 2023. The repayment plan’s terms were the most generous to date; under the program’s rules, many borrowers’ monthly bills would have dropped by as much as half.
But just as many of the plan’s benefits were going into effect, Republican-led legal challenges blocked the program. Unlike the Biden administration, Trump officials have not fought in the courts to preserve SAVE, and recently Congress repealed the plan altogether.
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The Education Department announced on July 9 that the interest-free payment pause that the Biden administration had enrolled SAVE borrowers in during the legal challenges will expire on Aug.1.
Ellen Keast, deputy press secretary at the Education Department, said the agency was obligated to end the interest-free pause under recent court orders.
Secretary of Education Linda McMahon said in a statement that borrowers in SAVE should “quickly transition to a legally compliant repayment plan — such as the Income-Based Repayment Plan.”
But under the other existing repayment plans, borrowers will see their bills “jump up unexpectedly,” said Malissa Giles, a consumer bankruptcy attorney in Virginia.
“I cannot imagine the stress that will be put on folks,” she said.
Higher education expert Mark Kantrowitz said, “We can expect payments under IBR to be more than double payments under SAVE.”

Repayment plan options have dwindled

Under Trump’s “big beautiful bill,” borrowers who take out federal student loans after July 1, 2026, will have just two repayment plans to choose from, compared with roughly a dozen options now. Existing borrowers will maintain access to other repayment options.
New student loan borrowers could enroll in either a standard repayment plan with fixed payments or a single income-based repayment plan: the “Repayment Assistance Plan,” or RAP.

Preston Cooper, a senior fellow at the conservative policy research organization American Enterprise Institute, wrote in a recent blog post that “scheduled monthly payments under RAP are significantly higher than those under the Biden administration’s SAVE plan for borrowers of the same income levels.”
Cooper provided an example of a borrower who earns $80,000 per year: their monthly bill under RAP will be $533, whereas it would be $179 with SAVE, he wrote.
“The student borrowers for whom the SAVE plan was the only affordable option will be severely impacted by these changes,” said Nierman, of the Education Debt Consumer Assistance Program.
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The “Base App,” which replaces Coinbase Wallet, will combine wallet, trading and payment functions as well as social media, messaging and support for mini apps.
The intent is to expand Coinbase’s reach to a new subset of consumers who aren’t necessarily interested in buying or trading crypto but could still reap the benefits of the so-called on chain economy.
The Base App will run on Coinbase’s in-house built public blockchain, also called Base. In-app transactions will be powered by USDC.

Dominika Zarzycka | Nurphoto | Getty Images

Coinbase unveiled Wednesday an “everything app” designed to bring more people into the crypto economy.
The “Base App,” which replaces Coinbase Wallet, will combine wallet, trading and payment functions as well as social media, messaging and support for mini apps – all running on the company’s homegrown public blockchain network Base, which is built on Ethereum.

So-called super apps like WeChat and Alipay – which bundle several different services and functionalities into a single mobile app – have long been viewed as the holy grail of fintech by the industry. They’re central to everyday life in China but haven’t been successfully replicated in the West. Meta Platforms and X have made attempts to realize that vision, integrating payments, messaging and social content, among other things.
For Coinbase, the intent is to expand its reach to a new subset of consumers who aren’t necessarily interested in buying or trading crypto, the company’s core business. Over-reliance on that revenue stream has been a sticking point for the company, and some analysts view the Base blockchain as a way for it to drive utility in crypto beyond speculative trading.
As part of the Base App launch, Coinbase also rolled out two key functions meant to help power it: an identity verification system called Base Account and an express checkout system for payments with the Circle-issued USDC stablecoin, called Base Pay.
Base Pay is a one-click checkout feature for USDC payments across the web, developed with Shopify. At the end of the year, Coinbase plans to bring Base Pay to brick-and-mortar stores with tap-to-pay support. Alex Danco, product manager at Shopify, said at Coinbase’s unveiling event that the function has been turned on for tens of thousands of its merchants this week, and will roll out to every merchant by the end of the year. Shopify will also offer 1% cash back in the U.S. for users who pay with USDC on Base later this year, he said.
Until now, enthusiasm around the Base network has been confined to builders and developers keen to use the technology. In perhaps the highest profile example, JPMorgan said last month that it’s launching a so-called deposit token on the Base blockchain.

Base is often touted for its ability to settle a payment in less than a second for less than a cent, which its fans expect will help the network grow in a way other crypto-based payments efforts haven’t.
Now, Coinbase hopes to tap into an opportunity to settle payments on the Base network that go beyond trading and payments. With the introduction of the everything app, the company is emphasizing the opportunity for a new economic model for content creators in particular – one that might give them more direct and diverse monetization options for their content as well as more control over their identity and data.
Coinbase will fund creator rewards and waive USDC transaction fees within chats in the app as part of the effort to bring more users on chain. It is not expected to generate significant revenue right away.
The new consumer app comes as the crypto industry and Coinbase, in particular, embrace a boom in product launches and rollouts thanks to the pro-crypto policies of the Trump administration and more clearly defined crypto regulations expected from Congress — perhaps as soon as this week. Last month Coinbase launched its first credit card with American Express and Shopify rolled out USDC-powered payments through Coinbase and Stripe.
Coinbase CEO Brian Armstrong has said both have a “stretch goal” to make USDC the number 1 stablecoin in the world, a position currently held by Tether’s USDT, and that he aims to make Coinbase “the number one financial services app in the world” in the next five to 10 years.

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Tech billionaire Peter Thiel has disclosed a 9% stake in a bitcoin miner through his venture capital firm Founders Fund
Bitmine Immersion Technologies recently initiated a buying strategy around ether and appointed market strategist Tom Lee of Fundstrat as chairman of its board
Interest in Ethereum has swelled amid a stablecoin fever following Circle’s IPO and ongoing progress on the Senate’s proposed stablecoin legislation

Peter Thiel, president and founder of Clarium Capital Management LLC, holds hundred dollars bills as he speaks during the Bitcoin 2022 conference in Miami, Florida, U.S., on Thursday, April 7, 2022. 
Eva Marie Uzcategui | Bloomberg | Getty Images

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Bitmine (BMNR) 1-month

The current wave of interest in Ethereum and related assets follows an announcement by Robinhood that it will enable trading of tokenized U.S. stocks and ETFs across Europe, and a groundswell of interest in stablecoins throughout June following Circle’s wildly successful IPO and ongoing progress in Congress on the Senate’s proposed stablecoin bill, the GENIUS Act.
The price of ether itself also continued its rally, up more than 4% Wednesday. The coin has doubled in price in the past three months.
Thiel is a venture capitalist and hedge fund manager best known as a cofounder of both PayPal and Palantir and an early investor in Facebook. Founders Fund was an investor in Tagomi, the crypto brokerage acquired by Coinbase in 2020, and Polymarket, the prediction market built on Ethereum.

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Starting in mid-2026, President Donald Trump’s massive tax and spending package will set new limits on student loan borrowing.
Experts predict this new policy could have lasting consequences for higher education. 

President Donald Trump’s massive tax and spending package will bring sweeping changes to federal student loans, in part by capping how much money people can borrow from the federal government to pay for college and graduate school.
Among other measures, the legislation, which Trump has called the “one big, beautiful bill,” sets new limits for students and their families. The following changes go into effect for new borrowers on July 1, 2026:

For the first time, borrowers will have a total lifetime borrowing limit of $257,500 for all federal student loans.

Unsubsidized student loans for graduate students will be capped at $20,500 per year with a lifetime loan limit of $100,000. Borrowing for professional degrees, such as those for doctors and lawyers, will be limited to $50,000 per year and $200,000 over a lifetime. Currently, graduate and professional students can borrow up to the full cost of attendance each year. 

Parent borrowing through the federal Parent PLUS loan program will be capped at $20,000 per year per student with a $65,000 lifetime limit. By current standards, parents of dependent undergraduates can also borrow up to the full cost of attendance each year.

Grad PLUS loans will be eliminated entirely. These currently allow grad students to borrow up to their entire cost of attendance minus any federal aid.

These new limitations “will reshape how students borrow,” said Lesley Turner, an associate professor at the University of Chicago Harris School of Public Policy and a research fellow of the National Bureau of Economic Research. 
“Students are either going to borrow less or make up the difference with private loans, or they will not start or complete a graduate program,” Turner said.
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Aspiring lawyers, doctors and dentists are most likely to be impacted by the new loan limits, Turner said. “It’s quite a substantial cut in the loans students have access to.”
Roughly 9.3% of law students, 27.5% of medical school students and 60% of those in dentistry programs graduated with more debt in 2020 than is allowed under the new loan limits, according to calculations by higher education expert Mark Kantrowitz.

Halfpoint Images | Moment | Getty Images

In fact, the average cost of medical school already exceeds $200,000. At private institutions, the average cost is closer to $300,000.  
The new student loan caps “will affect many prospective medical and other health professions students and worsen the nation’s persistent doctor shortage,” David Skorton, president and CEO of the Association of American Medical Colleges, said in a statement.  

Other experts say the new loan limits may provide a much-needed check on soaring tuition costs, which have jumped significantly in recent decades — outpacing inflation and other household expenses — leaving some students feeling priced out of higher education.
Nearly every year, students and their families borrow more to cover the rising cost of attendance, a trend that has led to a ballooning of total outstanding student debt to more than $1.7 trillion.
With new limits on how much people can borrow, high-priced schools might have to lower tuition or increase aid, Turner said.

Private student loans likely to fill the gap

The limits on federal student loans are likely to spur students to find other lenders to bridge the gap.
“The new loan limits for Parent PLUS loans and graduate/professional school loans will shift some borrowing from federal loans to private student loans,” Kantrowitz said. “This will particularly impact low-income students, who are less likely to qualify for private student loans.”
Unlike federal loans, private student loan lenders rely on credit scores for the borrower — which could be the student, a parent or even another relative or friend as a cosigner — to determine eligibility and interest rate. “Access is by no means guaranteed,” Turner said.

As it stands, roughly 90% of student loans come from the federal government, and the remaining 10% are private student loans, according to the College Board. 
Students often turn to private student loans once they have reached the federal student loan limits and still need additional education financing.
Already, private student loan volume is up significantly. Private student loan originations during the 2024-25 academic year jumped 8.63% from a year earlier, according to Enterval Analytics, a student loan data analysis firm.
Private loans can also come with fewer safety nets and less flexible repayment options compared to federal loans.
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The consumer price index rose 2.7% on an annual basis in June 2025, up from 2.4% in May, according to the Bureau of Labor Statistics.
However, the full impact of President Donald Trump’s tariffs is still to come, according to economists.

Customers line up at the check out booth on April 18, 2025 at a Costco branch in Niantic, Connecticut.
Robert Nickelsberg | Getty Images

The annual inflation rate ticked higher in June, in line with expectations, as lower prices at the gasoline pump somewhat offset higher prices at the grocery store.
Economists said they expect the full impact from the Trump administration’s tariff agenda to raise consumer prices more in the months ahead — but they said trade policies have already started to noticeably affect inflation.

The consumer price index, a key inflation barometer, rose 2.7% in the 12 months through June, up from 2.4% in May, the Bureau of Labor Statistics said Tuesday.

Tariffs’ inflationary effect

President Donald Trump’s tariffs continue to work their way through the U.S. economy, even as the risk of further escalation grows.
Trump announced Saturday that the U.S. will impose 30% tariffs on the European Union and Mexico starting Aug. 1. On Monday, Trump threatened to impose “secondary tariffs” on Russia’s trade partners, “at about 100%.”
Tariffs are a tax on imports from foreign nations, paid by U.S. companies that import the good or service. Businesses negatively affected are expected to pass on at least some of that additional cost to consumers through higher prices.
“While inventory front-running has mitigated the need to raise goods prices, it will become increasingly difficult for businesses to absorb higher import duties as pre-tariff stockpiles dwindle,” Sarah House, senior economist at Wells Fargo, said in a July 8 research report. “We expect core goods prices to pick up further in the second half of the year as a result.”

“As we are in this higher-tariff environment longer, you will begin to see more of these effects,” House told CNBC.
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White House economic advisor Kevin Hassett has contended that new tariff policies have not been as inflationary as expected because consumers are buying more American-made goods.
But other economists also predict the full impact from tariffs on pricing will likely show up in the second half of the year. 
“Inflation is going kick into a much higher gear in coming months,” said Mark Zandi, chief economist at Moody’s. “We are on the leading edge of that now, but it will become clearly evident in the months ahead.”
“Higher tariffs are also adding to businesses’ production costs and that will flow through to consumers more indirectly,” Zandi said.

‘This won’t be like 2022’

Still, longer-term inflation expectations are somewhat muted. “Despite accelerating inflation, this won’t be like 2022,” said Stephen Kates, a financial analyst at Bankrate. He pointed to the June report three years ago, when inflation spiked to 9.1%, marking the largest year-over-year jump since 1981.
In many ways, shoppers are still struggling with that sticker shock, Kates said. “People have long memories for that,” he said.
“I used to pay $2 for a can of peas and now it’s $3.50,” he said as an example. “That is a huge change, and you are constantly reminded of it every week.”

There were some mixed signals in this month’s report.
Grocery prices rose 0.3% over the month and were 2.4% higher year over year. The meats, poultry, fish and eggs index jumped 5.6% over the last 12 months. However, while eggs are still almost 30% higher than they were a year ago, they’re down 7.4% from last month.
Inflation for housing, the largest CPI component, increased just 0.2% for the month but was 3.8% higher compared with a year ago. That was the largest contributor to the overall CPI gain, the BLS said. 

Gasoline prices climbed by 0.1% from May to June, on a seasonally adjusted basis, but are down 8.3% for the year, according to the CPI data.
Meanwhile, prices for used cars and trucks declined in June, with prices on new vehicles falling 0.3% and used car and trucks down 0.7%. Airline fares were also slightly lower, by 0.1%.
“There are a lot of cross currents, but the net is a general tilt higher, and that’s a precursor to stronger inflation numbers in the months ahead,” Zandi said.
Core inflation — which strips out energy and food prices, which can be volatile categories — was up 2.9% in June.
Correction: Eggs were down 7.4% from last month. An earlier version misstated the percentage.

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To live comfortably in retirement, workers who are investing in retirement plans expect to need a seven-figure sum.
Yet many say they will fall short of that goal.
Here are the moves experts recommend to boost retirement savings.

Vithun Khamsong | Moment | Getty Images

American workers who participate in a retirement plan expect to need an average $1.28 million set aside to retire comfortably, according to a new survey from investment management company Schroders.
Yet just 30% of workers say they expect to have $1 million or more by the time they retire, the survey found. About half, 48%, expect to have less than $500,000, and 26% expect to have less than $250,000.

Other studies point to similar challenges, with Transamerica Center for Retirement Studies reporting that 68% of workers say they could work until retirement and still not have enough saved.
Feeling behind can prompt financial insecurities, including a fear of running out of money in retirement, according to Schroders.
Schroders’ survey was conducted between March and April and included 1,500 investors, including 602 retirement plan participants.
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Yet with competing financial priorities, workers may be tempted to prioritize their immediate needs over future retirement goals, according to Deb Boyden, head of U.S. defined contribution at Schroders.

“People think here and now, ‘I need that money to cover whatever expense that is hitting at this point,'” Boyden said.
Experts say there are several moves workers can make to help nudge their retirement balances higher.

Strive for a higher savings rate

While surveys may tout the grand total aspiring retirees think they need to have saved, experts say there’s another number that should be a priority instead — their retirement savings rate. That’s the share of pay that employees set aside, plus company contributions.
If a 401(k) or other retirement savings plan provides an employer match, experts generally say workers should contribute at least enough to reap the benefit of that free employer money.
The average promised match was 4.6% of pay in 2024, according to Vanguard’s latest annual report on defined contribution plans.

Yet to achieve a meaningful sum set away for retirement, experts say having a high savings rate is crucial.
The ideal target savings rate may range from 12% to 15%, including company contributions, according to Vanguard.
In 2024, the average 401(k) savings rate was in the low range of that sweet spot at 12%, including both employee and employer contributions, Vanguard’s report found.

Avoid tapping 401(k) funds

Workers may be tempted to tap their 401(k) or other work retirement plan if they’re short on cash.
Around 17% of savers said they have borrowed from their retirement plan, the Schroders survey found.
Among the reasons for tapping those funds included paying for unforeseen expenses or emergencies, paying down credit card or other debts, keeping up with a higher cost of living, purchasing a home or paying for medical care, according to the survey results.
While workers who take 401(k) loans may avoid taxes and penalties that come with withdrawals, they still lose out on the gains the money would have made if it had stayed invested. Importantly, if those borrowers leave or lose their job, they could be on the hook to repay those loans quickly.
To help avoid the temptation to borrow from retirement savings, workers may strive to build emergency savings that can serve as a buffer when cash needs arise, Boyden said.

Don’t put too much in cash

Nearly one-third of investors — 31% — say they don’t know how their retirement money is invested, Schroders found.
For those who do know, equities were the most popular retirement investment, with 31%. Meanwhile, cash came in second, at 23%, followed by fixed income with just 16%. Other allocations cited by respondents included target-date funds, which customize asset allocations based on a determined retirement date, as well as other miscellaneous investments.
While higher interest rates have made it possible to earn higher returns on cash, investors with a long-term time horizon would be wise to have higher allocations to equities and other investments that provide more potential upside.
Retirement savers who are tempted to play it safe and hold more cash may want to consider how long the lump sum they have set aside may last, Boyden said. By keeping their long-term goal in mind, they may feel more comfortable taking on more risk now, she said.
Ideally, investors would reassess those allocations quarterly, Boyden said. More

Student loan borrowers enrolled in the interest-free SAVE forbearance will soon see their debt begin to grow again, the Trump administration says.
Borrowers should take steps to find another repayment plan as soon as possible, experts said.

A person walks on campus at Muhlenberg College in Allentown, Pennsylvania, U.S. March 26, 2025. 
Hannah Beier | Reuters

Why is the interest-free forbearance ending?

Former President Joe Biden rolled out the SAVE plan in the summer of 2023, describing it as “the most affordable student loan plan ever.”

But millions of borrowers who signed up for the plan were caught in limbo after GOP-led lawsuits led to a block on the plan last year. The Biden administration put these borrowers in a forbearance while the legal challenges played out, and stopped interest from accruing on people’s debts in the meantime.
Forbearances are a period during which federal student loan borrowers are excused from making payments.

The Trump administration has called the SAVE plan illegal. In the announcement ending the pause, it said the Education Dept. “lacks the authority to put borrowers into a zero percent interest rate status.”
The Biden administration “invented a zero percent ‘litigation forbearance,’ forcing taxpayers to foot the bill,” the Education Dept. wrote.
Borrowers enrolled in the forbearance will not be charged interest retroactively, the department said.

What should SAVE enrollees do now?

Because the SAVE plan is no longer available and its interest-free forbearance is ending, borrowers need to move quickly to find a new repayment plan, experts said.
Unfortunately, the options are limited.
Currently, there is only one income-driven repayment plan available to borrowers: the Income-Based Repayment plan, said higher education expert Mark Kantrowitz. (Income-driven repayment plans cap borrowers’ monthly bills at a share of their discretionary income, with the aim of making payments affordable.)
President Donald Trump’s “one big beautiful bill” establishes another IDR repayment plan, known as RAP, but that plan won’t be operational until next year.
“The Department urges SAVE borrowers to consider enrolling in the Income-Based Repayment Plan authorized under the Higher Education Act until the Department can launch the Repayment Assistance Plan,” the agency said in its release. More