On August 1, 2025, interest resumed for SAVE borrowers in forbearance — and most don’t realize what this means for their financial future.
If you’re one of the millions enrolled in SAVE and not making payments right now, this post is for you. Your balance may be quietly growing, and if you’re planning to buy a home, your loan could directly affect your mortgage eligibility.
Let’s break down everything you need to know — and do — before it’s too late.
According to the Federal Reserve, 10.2% of all student loan borrowers — over 8 million people — are already 90 days delinquent. Many of them didn’t know their payments resumed, received conflicting notices, or had auto-debit turned off without warning.
If you think you're in good standing because you haven’t received a notice, think again.
Student loan auto-debit was canceled for every borrower during the pandemic.
You must manually re-enroll to resume payments — or risk default without knowing.
If you’re in SAVE forbearance, you haven’t had to pay anything — but now, interest is quietly piling up.
Let’s say you borrowed $85,000. With an interest rate of 6.5%, you're now accruing roughly $15–20 in interest per day — that’s $450–600 a month. In six months, that’s $2,700–3,600 added to your balance.
This can significantly affect your credit score, repayment timeline, and more urgently — your mortgage affordability.
Most lenders use a standard formula to calculate your monthly student loan payment if you're not in repayment. For conventional loans (like Fannie Mae), they use 1% of your total loan balance.
So, if your balance has grown to $90,000, your "phantom" payment is now $900/month, even if you're paying $0 in SAVE.
Let’s say you’re eligible for an IDR payment of $300/month — that’s a $600 difference.
That difference could reduce your home affordability by $50,000–$60,000 depending on the loan program and rate.
We’ve seen many SAVE borrowers accidentally inflate their payment by doing one thing wrong:
Connecting studentaid.gov to their IRS tax data.
❌ Don’t do it.
✅ Instead, submit older proof of income manually to your servicer — especially if your past income is lower than your current.
For example, if you made:
You’ll want to submit 2023 income if it means a lower payment.
We clarified in this week’s video that SAVE forbearance months don’t automatically count toward Public Service Loan Forgiveness (PSLF). You must request a PSLF buyback, but this only applies when you're closer to the 120-payment mark. It’s not guaranteed to exist forever, so plan carefully.
Also — while the One Big Beautiful Bill didn’t officially expand PSLF eligibility to contract workers, we’ve helped many healthcare and mental health professionals in California and Texas get credit by having their main nonprofit employer sign the PSLF certification form.
We’ve helped thousands of borrowers lower their monthly payments and avoid expensive mistakes when recertifying or preparing to buy a home.
🗓️ Schedule a personalized 1:1 consult today.
Don’t let inaction raise your debt or delay your homeownership goals. You’ve got options — we can help you find the best one.