Borrowers in the Saving on a Valuable Education (SAVE) repayment plan have reported unexpected interest accumulation on their student loans. Currently, borrowers in the SAVE plan are in a general forbearance due to the ongoing litigation. During this time, no payments are due, and no interest is supposed to accrue.

However, some borrowers have noticed their loan balances increasing during this time.

This discrepancy has been particularly noted among borrowers serviced by MOHELA, but all loan servicers are affected. 

However, it’s important for borrowers to check their loans. While there are legitimate issues, other borrowers may have “thought” they were in forbearance, only to discover they are in an active student loan repayment plan and should have been making payments.

Loan Servicer Responses

Loan servicers and the Department of Education are aware of these issues and has stated that any interest improperly accrued due to administrative errors will be addressed. The timeline for blanket resolution is unknown, but it should be resolved before loan payments resume in late 2025 or early 2026.

Borrowers affected by these discrepancies can contact their loan servicers to ensure their loans are in SAVE and eligible for the forbearance. Loan servicers can put in a support request to remove the interest, but it may take time, and it’s not always a full resolution. If borrowers are confirmed in the SAVE forbearance, it will be resolved eventually.

Why This Is Frustrating To Borrowers

Even though the interest accruing doesn’t impact borrowers directly, it can be frustrating. It’s minimally impactful because no payments are due. There are some issues where it could also impact credit reporting, since the loan balance is incorrectly higher that it should be.

Borrowers are also generally concerned about loan servicing issues, since they’ve happened in the past.

Furthermore, borrowers are worried that if it’s not resolved before payments resume, they could be forced to make payments on a higher loan balance – which is not what the law says should happen.

Finally, borrowers trying to get this resolved have reported long wait times to reach their loan servicers. And when they do reach a customer service representative, they don’t have much to say, other than it’s a known issue.

Steps Borrowers Should Take Now

Given the ongoing issues, borrowers are advised to take proactive measures to ensure their loan accounts are accurate:

• Verify Repayment Plan Enrollment: Log into your loan servicer’s website to confirm that you are enrolled in the SAVE plan.
• Monitor Loan Statements: Regularly review your loan statements to check for any unexpected interest accrual or changes in loan balance.
• Contact Loan Servicer: If discrepancies are found, reach out to your loan servicer promptly to address the issue.
• Document Communications: Keep records of all communications with your loan servicer, including dates, times, and the names of representatives spoken to.
• File a Complaint if Necessary: If issues persist, consider filing a complaint with the Federal Student Aid office through StudentAid.gov. 

While it’s frustrating to see interest accruing when it shouldn’t be, this is a known issue for SAVE plan borrowers and should be resolved in the coming months.

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