How and When to Leave Student Loan Forbearance Under the SAVE Plan (and When Not To)

Millions of borrowers are being asked to leave the Saving on a Valuable Education (SAVE) plan forbearance, but the problem of being placed into a forbearance is one that has long impacted student loan borrowers. Forbearance generally does not count towards forgiveness programs, and with the SAVE forbearance ending, borrowers need an action plan for what to do next.

Here’s how to think about leaving a student loan forbearance.

When to get out of forbearance quickly and when to wait

If you’re in a processing forbearance of less than two months, I’d suggest not worrying about it. It should, in theory, count towards forgiveness if it’s coded as a processing forbearance.

Sometimes, though, forbearances are not coded correctly, or they last longer than expected.

For example, some borrowers have waited many months to be switched from their forbearance status to the Income-Based Repayment (IBR) repayment plan. Do those months count towards forgiveness? Shouldn’t it be classified as a processing forbearance?

Honestly, the rules are a mess right now, and it’s hard to force the hand of the Department of Education when it’s being actively dismantled, and its core functions are being moved elsewhere.

So, the smart move is to take matters into your own hands when your forbearance has lasted longer than a couple of months.

If it’s lasted less than a couple of months, sit tight and wait for processing of your income-driven repayment (IDR) plan request.

Applying for an IDR plan to get out of forbearance

If your forbearance has lasted more than two months (which is basically all SAVE plan forbearances), you can go to studentaid.gov/idr and reapply for IBR or another repayment plan, and you probably should reapply if you haven’t heard anything about your IDR application for an extended period.

This reapplication will be more likely to get you onto a repayment plan more quickly. 

From what we’ve seen, any applications that require manual action are being held up by the large layoffs that have taken place at the Department of Education. 

In contrast, apps that are processed online with the more recent website updates have been handled pretty quickly.

What about PSLF Buyback?

Theoretically, time in a forbearance can be bought back for PSLF purposes. But you can’t count on the buyback program existing long-term. It’s safer to get out of the forbearance and to hope for the ability to buy back time from the past.

But to stay in forbearance and hope for buyback in the future is a gamble, and it’s one that you should only take if you cannot afford to make payments.

Future status of forbearance and student loans (the 9 out of 24 rules)

Forbearance approvals used to be handed out whenever a borrower asked for one. But the new rules and the new administration will likely make it harder to get into a forbearance long-term. 

The new rules on forbearance for student loans issued after July 2027 restrict you to nine months of forbearance in a 24-month period.

That’s in stark contrast to the old regime of one-year-at-a-time forbearance approvals that could stretch for years or more.

So effectively, borrowers will be forced to repay their loans much faster than the old system allowed.

Forbearance is now something to use only for extraordinary circumstances

With the more restrictive rules surrounding student loan forbearance, borrowers are best served by getting onto a repayment plan (generally IBR, PAYE or RAP when it becomes available).

If you are repaying more expensive debt and do not qualify for a low IDR payment, then forbearance could be a reasonable temporary option.

But besides that case, borrowers who can afford to make payments need to promptly exit forbearance (including the SAVE forbearance if it hasn’t ended for you already) and begin making progress again towards forgiveness programs.