MOHELA: Why Are My Student Loans in Forbearance?

Your MOHELA student loans are in forbearance because the Saving on a Valuable Education (SAVE) Plan was struck down and repealed. This isn’t a typical forbearance you might request for financial hardship. It’s an automatic administrative action taken by MOHELA, at the direction of the U.S. Department of Education, after the SAVE Plan was struck down and repealed.

Here’s what happened:

1. You were either enrolled in the SAVE Plan or about to have your payments lowered under it.

2. A federal appeals court struck down the SAVE Plan, and the 2025 budget law repealed it.

3. With the plan gone, the Department of Education directed MOHELA to place affected borrowers into forbearance to prevent incorrect billing.

As a result, all MOHELA borrowers enrolled in SAVE, or those about to have their payments lowered under SAVE, were placed into forbearance. This forbearance keeps you from getting billing statements while servicers move borrowers off the discontinued plan. But that hasn’t been true for everyone.

This automatic forbearance differs from other types in several key ways:

1. It’s open-ended. Unlike typical forbearances that last for a specific period, there’s no set end date for this one.

2. It’s not by request. MOHELA initiated this forbearance without borrower action.

3. No forgiveness progress. Unlike the COVID-19 forbearance, this period doesn’t count towards Public Service Loan Forgiveness or income-driven repayment forgiveness.

The fact that this forbearance pauses your payments but also pauses your progress toward loan forgiveness is frustrating. But this isn’t the result of a MOHELA mistake. It comes from the end of the SAVE Plan and the broader changes to federal student loan programs.

Related: Biden Student Loan Forgiveness

This unexpected forbearance affects your MOHELA loans in three main ways.

First, interest generally accrues on your loans during this forbearance, so your balance can grow the longer payments are paused.

Second, this administrative forbearance shouldn’t negatively affect your credit score. It’s reported to credit bureaus as an administrative forbearance, similar to how COVID-19 forbearance was handled.

Finally, while there’s no immediate financial impact, this forbearance can affect your long-term repayment strategy. For example:

1. Extended repayment timeline: If you were aggressively paying down your loans, this pause might extend your overall repayment period.

2. Retirement planning: For those nearing PSLF completion and planning to retire soon, this forbearance could potentially delay your plans. I’ve met with a few clients who need just a few more months of qualifying payments before they get forgiveness under the PSLF Program. This situation is forcing some of them to consider delaying retirement or even having to return to work to make those final qualifying payments.

3. PSLF buyback complications: There’s a PSLF buyback option that might help in some cases, but it has limitations. You’re supposed to be working in public service when you apply, which could create issues for those who’ve already retired.

4. Emotional impact: Many borrowers feel frustrated by the lack of progress toward forgiveness. As humans, we want to move forward and feel we’re making headway on our goals. This pause can be emotionally taxing, even if the short-term financial impact is minimal.

Yes, you can opt-out of the forbearance to keep making monthly payments. But what happens after you make that decision is complicated. Plus, opting out won’t lead to you immediately earning PSLF or IDR Forgiveness credit.

Here’s what I mean.

When you opt out, you have to tell MOHELA what repayment plan to put you in. Since your goal in opting out is to keep earning credit towards a student loan forgiveness program, you must be in an income-driven repayment plan. At this time, the only plans that you can choose from are IBR and ICR, and possibly PAYE (Pay As You Earn) if you’re a newer borrower who meets specific eligibility requirements.

All of those plans will likely have higher payment amounts than what you were paying under SAVE. So before you switch, you need to make sure you can afford the new payment amount.

Then, when it’s time to apply, you submit an income-driven repayment application. The Federal Student Aid website processes income-driven repayment applications online again, so you can apply through the site.

Servicers are processing income-driven repayment applications again, so once you submit yours and it is approved, your qualifying payments start counting again.

The key point: to keep progressing toward forgiveness, you need to be enrolled in an income-driven plan like IBR. Even if you leave forbearance, you won’t make progress toward PSLF or income-driven repayment forgiveness unless you’re in an income-driven plan.

The same is true if you make voluntary payments during forbearance. These payments may help reduce your loan balance and be applied to future bills, but they won’t count toward any forgiveness programs.

Yes, this forbearance affects your loan forgiveness. Here’s what you need to know:

The SAVE Plan is gone. A federal appeals court (the U.S. Court of Appeals for the Eighth Circuit) struck it down, and the 2025 budget law repealed it. You can no longer enroll in or make payments under SAVE, and the months you spend in this forbearance don’t count toward PSLF or income-driven repayment forgiveness.

That’s why the move is to switch to another income-driven plan. Income-Based Repayment (IBR) is the main income-driven plan that remains, and getting onto it means your payments start counting toward forgiveness again.

If you’re pursuing PSLF, you may also be able to use PSLF buyback to pay for some of the paused months so they count toward your 120 payments.

Because the SAVE Plan was struck down and repealed, this forbearance is a permanent holding pattern, not a temporary pause — it won’t end on its own. Unlike typical forbearances, there’s no set end date, and waiting it out doesn’t earn forgiveness credit. Your options for getting your payments counting again are:

• Switch to another income-driven plan, such as IBR

• If you’re pursuing PSLF, use PSLF buyback for some paused months

• Ask MOHELA to move you off the forbearance and into a plan you can afford

While you’re in this forbearance, use the Loan Simulator on StudentAid.gov to estimate your future payments under different repayment plans. This includes IBR, ICR, PAYE, and standard plans like Extended or Graduated repayment.

When the forbearance ends, you’ll be expected to start making payments again. Because SAVE is gone, you’ll choose a new plan when you leave the forbearance — IBR is the main income-driven option that remains. MOHELA will contact you with instructions when it’s time to resume payments.

As for forgiveness credit, the months you spend in this forbearance don’t count toward PSLF or income-driven repayment forgiveness. If you’re pursuing PSLF, though, you may be able to use PSLF buyback to pay for some of those months so they count. We understand this is frustrating, especially if you’re close to qualifying for forgiveness.