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You may not have to make a student loan payment in July—what borrowers need to know

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As the Department of Education works with student loan servicers to update borrowers’ monthly payment amounts, some will get to skip a month.

It's not often student loan borrowers are excited to see their monthly billing statement.last year, monthly payments were calculated as 10% of a borrower's discretionary income — the amount of money they make over 225% of the federal poverty limit. But this July, that payment will drop to 5% of discretionary income for those with only undergraduate loans, meaning borrowers could see their monthly bills cut in half.

But loan servicers have been instructed to pause payments in July for some borrowers enrolled in the SAVE plan while their new monthly payments are calculated and their accounts updated.

 

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