New Analysis of Trump Policy Projects Borrowers Will Pay $27 Billion in Unnecessary Interest Charges Per Year as Millions Remain Unable to Access Legal Rights to Affordable Loan Payments
July 9, 2025 | WASHINGTON, D.C. — The U.S. Department of Education plans to restart student loan interest charges for the nearly 8 million borrowers stuck in a year-long payment pause stemming from right-wing lawfare challenging a Biden-era affordable loan repayment program, as reported by POLITICO.
In response, Student Borrower Protection Center (SBPC) released a new analysis of this policy change, projecting that a typical borrower will be forced to pay more than $3,500 per year or $300 per month in unnecessary interest charges.
Read the full SBPC memo including new economic and legal analysis, here: https://protectborrowers.org/memo-more-broken-promises-to-working-families-with-student-debt/
In total, borrowers affected by this policy change will be charged more than $27 billion in interest over the next 12 months, according to SBPC’s new analysis.
“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,” said SBPC executive director Mike Pierce. “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. These are teachers, nurses, and retail workers who trusted the government’s word, only to get sucker-punched by bills that will now cost them hundreds more every month. McMahon is turning a lifeline into a trap and fueling one of the biggest wealth grabs from working families in modern history. It’s a betrayal.”
Further Reading
Court order revealing the number of borrowers affected by the U.S. Department of Education (ED) blocking Income-Driven Repayment (IDR) applications: New Court Filing Reveals Backlog of Nearly 2 Million Student Loan Borrower Payment Plan Applications
SBPC and AFT statement on IDR application restoration but continued backlog: AFT v. ED Update: Under Pressure, ED Will Restore IDR Application Tomorrow But Will Not Immediately Resume IDR Paperwork Processing
AFT’s lawsuit against ED: AFT v. U.S. Department of Education
Sworn declarations from borrowers harmed by the IDR shutdown: Borrower Declarations_AFT Motion for TRO_03-24-2025
SBPC statement on ED taking down IDR application: Trump Administration Denies Access to Affordable Repayment Plans in Extreme Response to Right-Wing Court Order
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About Student Borrower Protection Center
Student Borrower Protection Center (SBPC) is a nonprofit organization focused on eliminating the burden of student debt for millions of Americans. We engage in advocacy, policymaking, and litigation strategy to rein in industry abuses, protect borrowers’ rights, and advance racial and economic justice.
Learn more at protectborrowers.org or follow SBPC on Twitter @theSBPC.