Student loans do count in your debt-to-income ratio when you apply for a mortgage, whether the loans are federal or private and whether or not you are currently making payments. What changes from borrower to borrower is the dollar figure the lender uses. Some programs accept the payment on your credit report, some require a calculated estimate based on your balance, and the rules differ across conventional, FHA, VA, and USDA loans.
How Lenders Decide Which Payment to Use
If your student loans are in active repayment and your credit report shows a real monthly payment, most lenders use that number. A $350 payment on your credit report becomes $350 in the DTI calculation. Simple.
The complication starts when your credit report shows $0 or no payment at all. That happens routinely with income-driven repayment plans, deferment, and forbearance. When there is no active payment to point to, each mortgage program has its own rule for filling in the blank, and those rules can add or subtract hundreds of dollars from the monthly obligation a lender assigns you.
Conventional Loans: Fannie Mae vs. Freddie Mac
Conventional loans are the most common mortgage product, and the two agencies behind them handle student loans differently.
Fannie Mae lets you qualify using a $0 monthly payment if you are on an income-driven repayment plan, as long as your loan servicer provides documentation confirming that $0 is your actual required payment.1Fannie Mae. B3-6-05, Monthly Debt Obligations
Freddie Mac took the opposite approach in 2023. Its updated guidelines require a payment amount greater than zero for every student loan in the DTI ratio.2Freddie Mac. Bulletin 2023-18 The same borrower with the same $0 IDR payment can qualify for a larger loan under Fannie Mae than under Freddie Mac. Worth asking your loan officer which agency will back your loan before you settle on a program.
FHA Loans
FHA requires lenders to include all student loans in your liabilities, no exceptions for deferment, forbearance, or $0 IDR payments. If the credit report shows a payment above zero, the lender uses it. If it shows $0 or nothing, the lender must use 0.5 percent of the outstanding balance as your monthly payment.3U.S. Department of Housing and Urban Development (HUD). FHA Single Family Housing Policy Handbook 4000.1
On a $50,000 balance, that is $250 a month added to your DTI, even if you owe nothing today.
VA Loans
VA loans use their own formula: 5 percent of the outstanding student loan balance divided by 12. A $30,000 balance produces a $125 monthly figure ($30,000 × 5% = $1,500 ÷ 12 = $125). If the actual payment on your credit report is higher than the calculated amount, the lender must use the higher one.4Veterans Benefits Administration. VA Circular 26-17-2 on Student Loan Debt Calculation
USDA Loans
USDA Rural Development loans follow rules close to FHA’s. A student loan payment above zero on your credit report gets used as reported. A $0 payment triggers the same fallback: 0.5 percent of the outstanding balance.5U.S. Department of Agriculture. HB-1-3555, Chapter 11 – Ratio Analysis
One additional note for USDA borrowers: student loans in a forgiveness program still count as your legal responsibility until the servicer formally releases you. They stay in your monthly debts until that release is documented.
How Deferment and Forbearance Change the Number
To see how much the program choice matters, take a borrower with $40,000 in deferred student loans and no payment on the credit report. Under FHA, the monthly figure would be $200 (0.5 percent of the balance). Under the VA formula, roughly $167 (5 percent divided by 12). Under Fannie Mae, a documented $0 IDR payment could be used instead. That is the difference between the same debt adding $200 to your DTI and adding nothing.
Income-Driven Repayment and the SAVE Plan Situation
Income-driven repayment plans cap federal student loan payments at a percentage of discretionary income. For borrowers with large balances relative to earnings, an IDR payment can be a fraction of the standard amount, sometimes $0. Under the programs that accept a reported IDR payment, that lower figure is what goes into your DTI.
Borrowers enrolled in the Saving on a Valuable Education (SAVE) Plan face uncertainty going into 2026. In December 2025, the U.S. Department of Education announced a proposed settlement agreement that would end the SAVE Plan. Under the proposed terms, no new borrowers would be enrolled, pending applications would be denied, and current SAVE borrowers would be moved to other available repayment plans. While the settlement awaits court approval, SAVE borrowers remain in a general forbearance, meaning payments are not required but interest continues to accrue.6Federal Student Aid. IDR Court Actions
Because forbearance typically causes your credit report to show a $0 payment, your mortgage lender may need to use a percentage-based estimate instead, which can raise your DTI. If you are a SAVE borrower planning to apply for a mortgage, ask your servicer what payment will actually be reported and consider whether moving to a different IDR plan produces a reported payment your lender can use.
Co-Signed Student Loans
A co-signed student loan appears on both parties’ credit reports and normally counts in both borrowers’ DTI calculations. FHA guidelines require the lender to include a co-signed monthly payment in your obligations unless you can show one of two things: either there is no possibility the lender will pursue you if the primary borrower defaults, or the primary borrower has made at least 12 consecutive months of on-time payments.7FHA Single Family Housing Policy Handbook. Origination Through Post-Closing/Endorsement – Underwriting the Borrower Using the TOTAL Mortgage Scorecard
Conventional and VA programs have their own exclusion standards, but the principle is the same. You need written evidence that the other borrower has been paying reliably. Gather 12 months of the other borrower’s payment records before you apply. That paperwork can save weeks during underwriting.
Ways to Lower the Student Loan Piece of Your DTI
Your DTI is a ratio, so you can improve it by cutting monthly debts or raising gross income. On the student loan side specifically:
- Switch to an income-driven repayment plan. A lower required payment on federal loans, once your servicer reports it, directly reduces the number a lender uses.
- Refinance private student loans. A lower rate or a longer term reduces the monthly payment. A longer term costs more in total interest but can be what makes the mortgage possible.
- Pay off smaller debts first. Wiping out a credit card or small auto loan removes that payment from the DTI entirely and frees up ratio room quickly.
- Compare programs. Fannie Mae accepts a verified $0 IDR payment. FHA and USDA use 0.5 percent of the balance. VA uses about 0.42 percent (5 percent divided by 12). The same file can look very different depending on which program runs it.
Timing matters. If you enroll in an IDR plan a few months before applying, your servicer has time to report the new payment to the credit bureaus. Lenders work from what the credit report says on the day you apply, not from what your servicer has just approved in the background.
Check Your Credit Report for Errors First
An incorrect student loan payment on your credit report can inflate your DTI and cost you an approval. A pre-consolidation payment that was never updated, or a deferred loan showing an active payment, both show up more often than they should. Both the credit bureau and the company that supplied the information have to correct errors at no cost to you.8Federal Trade Commission. Disputing Errors on Your Credit Reports
Dispute in writing with each bureau that shows the mistake, explain what is wrong, and attach supporting documents such as a recent billing statement from your loan servicer. The bureau has 30 days to investigate. If the error is confirmed, the servicer must notify all three nationwide credit bureaus.8Federal Trade Commission. Disputing Errors on Your Credit Reports Pull your reports well before you plan to apply. A month is the minimum, and two is safer.