Key Points
- MOHELA confirmed that borrowers on the SAVE plan are in 0% interest status and no payments are currently required.
- A system issue is causing borrowers to receive false interest accrual on their loan statements.
- While the error does not require borrower action, borrowers are encouraged to verify their account information and SAVE enrollment.
After days of borrower confusion, student loan servicer MOHELA has posted a public notice confirming that interest is not accruing for borrowers currently in the SAVE plan administrative forbearance. The notice comes after concerns emerged that loan balances were increasing, despite federal guidance stating that no interest should accrue during the legal pause.
Borrowers on the Saving on a Valuable Education (SAVE) plan are currently not required to make payments due to the ongoing court injunction that paused the repayment plan. The Department of Education had previously stated that interest would remain frozen while these issues were resolved. But recent loan interest and forbearance notices have sparked alarm, showing growing balances in some borrower accounts.
"If you recently received an interest notice for your student loan account, please know that this is not a bill, and no action is necessary at this time," MOHELA stated. "For borrowers on the SAVE administrative forbearance, interest is currently set at 0%."
Borrowers Saw Errors Before Notice Was Posted
The clarification followed multiple complaints from borrowers who noticed unexpected interest charges on their accounts. Many believed they were in forbearance under the SAVE plan and were surprised to see their balances rising. The error appears to have been administrative in nature. MOHELA and other loan servicers acknowledged that affected accounts would be corrected before payments resume.
Conversation with Mohela about student loan interest letter and SAVE plan
byu/ThisFracturedMind inStudentLoans
The timeline for fixing these account issues remains unclear.
The only way for borrowers to confirm their SAVE status was to call their loan servicer or validate the status on StudentAid.gov. Call centers have been flooded in recent months, with long hold times and limited responses. Some borrowers were told the issue was being handled but received little in the way of specifics or confirmation.
Borrower Concerns Despite Clarification
While the MOHELA update confirms that no interest is due and no payments are required, the lack of consistent communication over the past few months has caused concern. Borrowers have voiced fears that inflated student loan balances could affect their credit or future repayment terms if not corrected quickly.
Some also worry about broader trust in loan servicing, which has long been a pain point in the federal student loan system. This episode underscores the lingering challenges facing borrowers as the student loan system adjusts to legal, technical, and policy changes all at once.
Borrowers who are unsure about their status can take a few important steps:
- Log in to your servicer account and verify that your loans are listed under the SAVE plan.
- Review your balance and transaction history to confirm no new interest has been added incorrectly.
- Take screenshots or download statements for your records in case disputes arise.
- Contact your servicer only if you find an error, as the issue is not expected to require action for most borrowers.
What To Watch Next
Loan payments are currently paused for all SAVE borrowers, and no interest should be accruing. However, litigation over the program continues, and borrowers should remain alert to future changes.
If repayment resumes before this issue is fixed systemwide, the Department of Education has committed to ensuring borrowers are not penalized.
For now, the official notice from MOHELA should offer reassurance: if you're on the SAVE plan and received a confusing notice, your interest rate remains 0%, and no action is needed.
Don't Miss These Other Stories:
Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.