Federal student loan payments are not paused for most borrowers. The pandemic-era suspension ended in late 2023, and more than 42 million borrowers are back to owing a monthly bill. The one exception is borrowers enrolled in the Saving on a Valuable Education (SAVE) plan, who remain in a court-ordered administrative forbearance while litigation over the plan continues. Even that group lost a key benefit on August 1, 2025, when interest started accruing on their balances again.
Who Is Still Paused, and Why
The only borrowers currently excused from making payments are those enrolled in SAVE, along with anyone whose application to join SAVE was pending when enrollment closed. Everyone else is on a regular repayment schedule. Interest resumed on September 1, 2023, and the first post-pause bills came due in October 2023.1U.S. Department of Education. U.S. Department of Education to Begin Federal Student Loan Collections and Other Actions to Help Borrowers Get Back Into Repayment Servicers are sending statements and reporting activity to the credit bureaus as they did before the pandemic.
SAVE borrowers are paused because of a lawsuit, not a policy choice. In 2024, seven state attorneys general sued the Department of Education, arguing that SAVE’s lower payment thresholds and built-in forgiveness went beyond what Congress authorized in the Higher Education Act.2U.S. Court of Appeals for the Eighth Circuit. Missouri v. Trump, No. 24-2332 – Opinion Filed February 18, 2025 The Eighth Circuit issued a broad injunction blocking the Department from forgiving principal or interest under SAVE, waiving interest charges, or applying SAVE’s payment formulas.3Missouri Attorney General. United States Court of Appeals – Eighth Circuit No. 24-2332 and No. 24-2351
With so much of the plan blocked, the Department moved every SAVE borrower into administrative forbearance automatically. No application, no hardship showing, no action required. SAVE is no longer accepting new enrollees.
The Pause Is No Longer Free
When SAVE forbearance first began, the Department set the interest rate on affected loans to zero. That ended on August 1, 2025, when the Department restarted interest charges to comply with the court’s injunction.4U.S. Department of Education. U.S. Department of Education Continues to Improve Federal Student Loan Repayment Options, Addresses Illegal Biden Administration Actions The zero-interest months are not retroactively charged, but from August 2025 onward, balances are growing at each borrower’s contractual rate even though no payment is due.
Two things happen while you sit in this forbearance. Your balance climbs because interest keeps compounding, and you get no credit toward any forgiveness program. When you eventually leave the forbearance for a real repayment plan, unpaid interest may capitalize, meaning it is added to your principal so future interest is calculated on the larger amount.5Federal Register. Reimagining and Improving Student Education
What SAVE Borrowers Should Do Now
The Department of Education is telling SAVE borrowers to switch plans, specifically to Income-Based Repayment (IBR).4U.S. Department of Education. U.S. Department of Education Continues to Improve Federal Student Loan Repayment Options, Addresses Illegal Biden Administration Actions Moving to a plan where you can actually make payments is the only way to stop interest from stacking and start earning months toward Public Service Loan Forgiveness or income-driven cancellation. You can request a change by contacting your servicer or submitting an IDR request through your federal student aid account.
The main options right now:
- Income-Based Repayment (IBR). Payments are 10% or 15% of discretionary income depending on when you first borrowed, with forgiveness after 20 or 25 years. You no longer have to show a partial financial hardship to enroll.6Federal Student Aid. One Big Beautiful Bill Act Updates
- Standard Repayment. Fixed payments over 10 years. No forgiveness, but the fastest payoff.
- Graduated Repayment. Payments start lower and step up every two years across a 10-year term.
Pay As You Earn (PAYE) and Income-Contingent Repayment (ICR) are still available to borrowers whose loans were disbursed before July 1, 2026, but both plans are being phased out. Any new loan disbursement on or after that date ends your access to PAYE and ICR even if you were previously enrolled.6Federal Student Aid. One Big Beautiful Bill Act Updates A new plan called the Repayment Assistance Plan (RAP) opens on July 1, 2026, and calculates payments based on total adjusted gross income rather than discretionary income.7Congressional Research Service. The Repayment Assistance Plan (RAP) in P.L. 119-21 For now, IBR is the practical bridge.
What the Pause Does to Your Forgiveness Clock
Months in the SAVE administrative forbearance generally do not count toward any forgiveness program. They do not count as qualifying payments for the 120 needed under PSLF, and they do not count toward the 20 or 25 years required for income-driven cancellation.2U.S. Court of Appeals for the Eighth Circuit. Missouri v. Trump, No. 24-2332 – Opinion Filed February 18, 2025 Teachers, nurses, government workers, and others counting on PSLF are effectively frozen in place.
There is one narrow way to recover PSLF credit for those months, called PSLF Buyback. You can pay retroactively for forbearance months, but only if all of these are true:
- You have a Direct Loan with a remaining balance.
- You have at least 120 months of certified qualifying public service employment and do not plan to certify more.
- Your qualifying employment covers the specific months you want to buy back.
- Buying those months back will complete your 120 qualifying payments and trigger forgiveness.8Federal Student Aid. Public Service Loan Forgiveness (PSLF) Buyback
Buyback only helps if you are close to 120 payments and forbearance months are the last gap. You cannot buy back months when your loan was in default, in a grace period, or in an in-school status.8Federal Student Aid. Public Service Loan Forgiveness (PSLF) Buyback For most SAVE borrowers, switching to an active repayment plan and resuming qualifying payments is the stronger move.
If You Are Not in SAVE, Your Payments Are Due
Borrowers who assumed they were still paused should confirm their status with their servicer. Federal loans are reported to the credit bureaus as delinquent once they are 90 or more days past due, with reporting in 30-day intervals through 180 days and beyond. A loan enters default after 270 days of missed payments.9Federal Student Aid. Credit Reporting
Default has real consequences. The government can garnish up to 15% of your disposable pay without a court order.10Federal Student Aid. Collections on Defaulted Loans Your federal tax refunds and certain federal benefits can be seized through the Treasury Offset Program.11U.S. Department of the Treasury Bureau of the Fiscal Service. Treasury Offset Program – FAQs for Debtors in the Treasury Offset Program Default also cuts you off from new federal student aid.
If your income is low but you have not fallen behind yet, ask your servicer about economic hardship deferment, which pauses payments for up to 36 months when your income is below 150% of the federal poverty guideline for your family size. Requesting a plan change or a deferment before a missed payment is far easier than fixing a delinquency after the fact.