This story originally appeared in Newsweek.

Experts have warned the return of accruing student loan interest could have major implications on the lives of young adults, and America’s population as a whole—from delaying family formation to causing them to stop buying prescription medication.

On August 1, the Trump administration will resume interest charges on the accounts of around 8 million borrowers, who had previously been granted an interest-free forbearance period under the Biden administration’s Saving on a Valuable Education (SAVE) Plan.

The Trump administration has deemed the SAVE plan “illegal,” saying it intends to bring back “fiscal responsibility to the federal student loan portfolio.”

When approached for comment, the Department of Education pointed Newsweek to its press release on the subject containing a statement from U.S. Secretary of Education Linda McMahon.

“For years, the Biden Administration used so-called ‘loan forgiveness’ promises to win votes, but federal courts repeatedly ruled that those actions were unlawful,” McMahon said.

“Congress designed these programs to ensure that borrowers repay their loans, yet the Biden Administration tried to illegally force taxpayers to foot the bill instead,” she added.

Why It Matters

Overall, the change will see borrowers being charged more than $27 billion in interest over the next 12 months, which will have wide repercussions on the lives of students. For example, the financial challenges and distress from student loan debt were found to reduce marriage and childbearing among young adults in a study by the Council on Contemporary Families.

Yet President Donald Trump has pledged to increase birth rates across the country, as America’s aging population and low birth rates have become a widely felt concern.

What To Know

Former President Joe Biden established the SAVE plan to help offset the financial burden placed on students. Earlier this year, the plan was barred due to a federal court injunction, although the court did not give a conclusion on the legality of the plan and halted it while it was being challenged in court.

The Trump administration said bringing back the accrual of interest on loans was to “comply with a federal court injunction that has blocked implementation of the SAVE Plan, including the Department’s action to put SAVE borrowers in a zero percent interest rate status.”

The court has not mandated any order to resume interest, although its injunction was reported as still in place at the end of last month.

“Due to ongoing litigation, SAVE borrowers do not yet know when their administrative forbearance will end, and payments will resume,” Nicholas Hillman, director of the Student Success Through Applied Research (SSTAR) Lab at the University of Wisconsin–Madison, told Newsweek.

“All they can be certain of is their interest will now start to accrue, and that’s cold comfort for borrowers who have—for no fault of their own—been stuck in administrative forbearance,” he added.

The Department of Education is now also encouraging borrowers to opt in to new repayment plans, seemingly in anticipation of the SAVE plan failing in court—describing the SAVE plan as a “false promise of loan cancellation and zero monthly payments, despite multiple federal courts striking down such policies.”

The Trump administration is offering a new income-based Repayment Assistance Plan that will be available to borrowers by July 1, 2026.

“Either way, borrowers have a lot of uncertainty right now and have for months—even years,” Hillman said.

The Impact of Student Debt

Discussing the findings of her research on the impact of student debt on young people, Arielle Kuperberg, a professor of sociology at the University of Maryland, Baltimore County, told Newsweek that “some people moved home with their parents, and many parents took their kids out of extracurricular activities” due to the strain of debt.

Many young adults also reported putting off marriage and especially childbearing because of their loan payments, she said.

Kuperberg added: “I think all of these trends are likely to get more pronounced as loan payments go up.”

In her research on the impact of student debt when loan payments were resumed in 2023, after a freeze due to the COVID-19 pandemic, she found that 17 percent of young people put off medical care or cut spending on prescription medication, while 19 percent canceled gym memberships or stopped other exercise-related activities.

Additionally, 52 percent switched to cheaper products at the grocery store, while 36 percent reduced their grocery bill by eating less.

“We will end up with a more extreme version of the trends that are already causing problems in the U.S.; a shrinking population, eventually an elderly population, in worse health who have less retirement savings and are more dependent on things like Social Security and Medicaid, but also fewer people paying into Social Security and Medicaid because of the below-replacement fertility rate leading the population to shrink,” Kuperberg said of the impact of the latest move.

What People Are Saying

U.S. Secretary of Education Linda McMahon said: “Since day one of the Trump Administration, we’ve focused on strengthening the student loan portfolio and simplifying repayment to better serve borrowers. As part of this effort, the Department urges all borrowers in the SAVE Plan to quickly transition to a legally compliant repayment plan – such as the Income-Based Repayment Plan. Borrowers in SAVE cannot access important loan benefits and cannot make progress toward loan discharge programs authorized by Congress.”

Nicholas Hillman, director of the SSTAR Lab at the University of Wisconsin–Madison, told Newsweek: “The process of turning the student loan repayment system ‘on’ is much harder for the federal government and for borrowers than it is to turn ‘off.’ Because of this challenge, I fully anticipate the transition back into good standing— making on-time payments and paying down loans—will continue to vex the entire loan repayment system and especially SAVE.”

Arielle Kuperberg, a professor of sociology at the University of Maryland, Baltimore County, told Newsweek: “I think wider implications include lower marriage rates, lower childbearing rates, more children born out of marriage for college-educated adults with loans. My research has also indicated that loans lead to worse health and mental health, less health care use and more major medical problems. Also, many young adults are not able to save much at all, if anything, for retirement because all their “extra” income is going to loans.”

She added: “There is little understanding of how college costs have skyrocketed over the past several decades in response to lower state support for higher education, more demand for higher education, and higher education costs due to things like technology and the cost of living becoming more expensive.

“Previous generations took out loans too, but in smaller amounts that were repayable. Now we have a generation of young adults in long-lasting debt that they can’t pay off, who are contribut[ing] to trends that have the potential to cause major problems in the long run. I think the government should charge as close to zero interest on student loans as possible, and also directly fund public higher education so that students don’t have to go into as much debt to begin with.”

What Happens Next

The new policy to restart interest accrual will start on August 1 unless further administrative or legal action is taken.