Trump Education Secretary Linda McMahon quietly instructed student loan companies to begin charging interest to nearly 8 million student loan borrowers trapped in an extended, interest-free payment pause for more than one year, beginning on August 1st, 2025.
Despite representations by the U.S. Department of Education (ED) to the contrary, no federal or state court—including 8th Circuit Court of Appeals—has issued an order instructing ED to resume charging these borrowers interest or calling into question the Secretary’s authority to waive interest accrual for borrowers whose payments have been suspended.
The memorandum below offers context and analysis demonstrating the significant, ongoing financial harm the Trump Administration will cause these borrowers and the broader economy. In short, Student Borrower Protection Center estimates that a typical borrower affected by this Trump Administration policy change will incur more than $3,500 in unnecessary interest charges per year or roughly $300 per month.
Read the Memo: More Broken Promises to Working Families with Student Debt
Read the Press Release: Trump Administration to Restart Student Loan Interest Charges for Nearly 8 Million Borrowers, Borrowers Will Face More than $3500 Per Year in New Charges