The SAVE Pause Is Over — What Student Loan Borrowers Should Know and Do Next

When student loan payments restarted in 2023, many borrowers enrolled in the Saving on a Valuable Education (SAVE) plan breathed a sigh of relief — the plan came with generous benefits and even a payment pause during legal challenges.

But as of August 1, 2025, the interest-free ride is officially over.

If you're still sitting in the SAVE forbearance pause, it's time to take a closer look at your strategy. Because staying on pause could mean stalled forgiveness and a growing loan balance.

Here’s what’s happening — and what PeopleJoy recommends instead.

Your Loan Balance Is Now Growing Again

Since August 1, borrowers in SAVE forbearance are accruing interest again. And it adds up fast.

💡 Example: If you owe the average federal student loan balance of $39,000 at 6.7% interest, you’re now racking up about $219 in interest per month just by doing nothing.

“If they stay in forbearance, it will just dig them into a deeper hole,” says higher ed expert Mark Kantrowitz [CNBC].

📌 PeopleJoy Tip: If your goal is loan forgiveness or simply getting out of debt faster, don’t let compounding interest work against you. Switching to an active plan gets you moving in the right direction.

You're No Longer Making Progress Toward Forgiveness

Whether you’re pursuing Public Service Loan Forgiveness (PSLF) or general IDR loan cancellation after 20–25 years, the SAVE forbearance pause isn’t helping.

Even if you work full-time at a nonprofit hospital or public school, your paused months do not count toward forgiveness.

📌 PeopleJoy Tip: Consider switching into an active IDR plan so every monthly payment counts — especially if you’re pursuing PSLF.

A New Plan Called RAP Is Coming — But Not Yet

By July 1, 2028, the Department of Education is expected to auto-enroll SAVE forbearance borrowers into a new repayment plan: RAP (Repayment Assistance Plan) — created under a new law passed during the Trump administration.

While RAP may help some low-income or dependent-heavy households, it could lead to higher payments for middle-income earners or joint filers.

📌 PeopleJoy Tip: Don’t wait to be auto-switched. Take control now by choosing the best option based on your income, career, and forgiveness goals.

What Should You Do Now?

The Department of Education recommends borrowers switch out of the SAVE pause — and experts agree.

Best Option Today? Most borrowers may benefit from the Income-Based Repayment (IBR) plan — one of the few remaining income-driven plans that still caps your monthly payment based on income and family size.

📊 Use PeopleJoy’s SAVE Transition Tool or the federal loan simulator to compare plans.

But not everyone should jump ship. For example:

• If you’re using this pause to pay off higher-interest debt (like a 22% credit card), it might still be a smart short-term play.
  
• If you’re expecting a major income drop, switching too soon might bump your payment up.
  

💬 Need Help? PeopleJoy’s tools can walk you through your options and help you make the best decision — fast.

🧠 Bottom Line

The SAVE forbearance pause may feel like a safe place — but it’s no longer a smart place for most borrowers. With interest growing and forgiveness timelines on hold, the best path forward is an active repayment plan.

PeopleJoy is here to help public service professionals — especially nurses, teachers, and nonprofit staff — make smart moves that lead to real debt relief.