FHA updated how student loan debt is calculated — and this is one of the most impactful changes in years.

The Update

• Lenders can now use your actual monthly student loan payment, not the inflated 1% rule previously used

• This lowers your debt-to-income ratio

• More borrowers qualify who were previously blocked by unrealistic calculations

Who This Helps the Most

• Teachers

• Healthcare workers

• Early-career professionals

• Borrowers using income-driven repayment plans

• Anyone with federal student loans

This change is especially helpful in Nome where essential workers often carry student debt but have stable, long-term jobs.