The Department of Education announced on July 9 that student loans for borrowers in the SAVE plan would start accruing interest on August 1. Their loans, however, will remain in a general forbearance. To avoid interest charges, the Department of Education is encouraging borrowers to switch to another payment plan.

Interest is set to begin accruing for the 8 million borrowers enrolled in former President Joe Biden's SAVE repayment plan, which courts paused.

The Education Department said on Wednesday it would resume applying interest on Aug. 1 to federal student loans of nearly eight million borrowers who enrolled in the SAVE plan.