What happens if you stay in the SAVE payment pause — and why it may cost you

When student loan payments paused under the Saving on a Valuable Education (SAVE) plan, it offered breathing room to borrowers caught in a complex and shifting policy environment. But with recent legal developments and a resumed interest schedule, that relief is no longer as risk-free as it once seemed.

As of August 1, the Trump administration resumed interest charges for borrowers still in SAVE plan forbearance. The Biden-era payment pause was designed to protect borrowers while the SAVE plan faced legal scrutiny. But with the plan now effectively dismantled, the Department of Education is urging borrowers to switch repayment plans—sooner rather than later.

For anyone still in SAVE forbearance, this is more than a bureaucratic change. It could affect your loan balance, your progress toward forgiveness, and your long-term financial plan. Here’s what borrowers need to understand—and what steps to consider now.

If you’ve stayed in the SAVE plan’s forbearance, the most immediate consequence is the resumption of interest accumulation. According to higher education analyst Mark Kantrowitz, a borrower with the average federal loan balance of $39,000 and an interest rate of 6.7% could see their debt grow by roughly $219 per month without payments. That’s more than $2,600 annually in interest alone.

The math is simple, but the impact compounds over time. If you’re holding off on payments with no clear plan to resume or switch, your balance may quietly outpace your ability to repay—and you’ll be paying for this pause long after the forbearance ends.

This is why most financial planners view forbearance as a temporary relief tool—not a permanent strategy. When interest resumes without a corresponding repayment plan, the financial effect is often worse than it seems.

One of the more hidden—but equally important—consequences of staying in SAVE forbearance is the stall in loan forgiveness progress. Whether you’re pursuing Public Service Loan Forgiveness (PSLF) or a standard income-driven repayment (IDR) forgiveness track, qualifying months only count if you’re actively enrolled in an eligible plan and making payments.

That means each month in forbearance doesn’t move you closer to forgiveness. Instead, it extends your timeline—often by more than just the months missed, especially if your loan balance grows and interest capitalizes. For many borrowers, forgiveness eligibility is a 20–25 year journey. Losing even one year of progress by staying paused can shift the goalposts meaningfully, especially for borrowers counting on PSLF’s 10-year forgiveness clock.

As Betsy Mayotte of The Institute of Student Loan Advisors puts it: "Hanging out in that [SAVE forbearance] status means losing time toward that goal." The takeaway is clear: pausing might feel harmless, but it delays the very outcome many borrowers are working toward—debt freedom.

The Department of Education has signaled that borrowers still in SAVE forbearance may eventually be transitioned into a new repayment structure called the Repayment Assistance Plan (RAP), which was introduced under President Trump’s latest tax and spending legislation. That transition is currently expected by July 1, 2028—but experts warn that timeline could change. Kantrowitz notes that the administration could accelerate that process, forcing borrowers to switch sooner than anticipated.

Waiting for that automatic shift may feel easier, but it comes with trade-offs. Borrowers who passively wait may end up on a plan with different forgiveness rules, higher payment minimums, or eligibility terms that don’t match their income or family structure. That’s why financial advisors urge borrowers to act now—while they still have some choice in the matter.

For many borrowers, the best option is to exit SAVE forbearance and select a currently available repayment plan. The most widely recommended path for now is the Income-Based Repayment (IBR) plan. IBR limits your monthly payment to a set percentage of discretionary income and continues to offer forgiveness after a set number of qualifying years. It’s not as generous as the original SAVE plan—but it remains one of the more manageable options left standing after recent court rulings.

That said, this decision should align with your broader financial picture. If you’re juggling high-interest credit card debt, for example, the temporary payment reprieve may help you stay afloat. But even then, planners advise having a short exit window—ideally within 3–6 months—before student loan interest becomes a larger drag on your finances than credit card interest relief can solve.

Here are three practical steps to take:

1. Run the numbers. Use a loan simulator or federal repayment estimator to calculate how much your monthly payments would be under IBR or another income-driven plan. Compare that to how much your debt will grow monthly under forbearance.
2. Reassess your timeline. Are you counting on PSLF? Do you want to be debt-free before retirement? These goals are time-sensitive, and each month in forbearance delays your progress. Use your goals to guide urgency.
3. Check your eligibility regularly. The legal and policy landscape is still shifting. Bookmark the Federal Student Aid website or check in with your servicer quarterly. A plan that works today may be suboptimal by year-end.

This isn’t just about student loans. It’s about your entire financial trajectory. Staying paused in the SAVE forbearance may feel like the safe path, but it creates invisible drag on other priorities.

Consider this: a growing student loan balance can affect your credit profile, limit your borrowing power for a mortgage, or delay savings milestones like retirement or college planning for your children.

It also affects your risk posture. If you're relying on forgiveness, every month that doesn’t count toward that target increases your exposure to future policy changes or employment disruptions.

The broader question becomes: is this plan still aligned with your life?

Student loan debt is a long-term financial contract. When interest resumes and forgiveness stalls, your repayment strategy needs to evolve.

Financial clarity doesn’t always mean cutting costs—it means understanding what your money is doing while you're not looking. If your loan balance is growing and your forgiveness clock is stalled, the cost of inaction may be greater than any benefit from staying paused. For borrowers using this pause strategically—say, to pay off a 22% APR credit card—clarity still matters. Set a date to revisit your student loan plan. Monitor how much your balance has changed. Ask yourself whether the tradeoff still makes sense.

For others, particularly those in public service jobs or counting on eventual debt cancellation, re-enrolling in an eligible repayment plan could be the difference between 10 more years of debt—or 20. There’s no universal answer. But there is one constant: interest compounds, and time lost in forgiveness progress is hard to recover.

The SAVE forbearance may have started as protection—but it is no longer a forward-moving path. With interest now back in play, and forgiveness timelines on hold, this pause is no longer neutral. The best way to protect your financial future is to re-engage with your repayment strategy. Whether that means switching to IBR, consolidating loans, or temporarily pausing with purpose, your choice should be active—not accidental.

You don’t need to solve everything overnight. But you do need a next step. Because when it comes to student loan debt, slow progress beats silent growth every time.