Student loans have been confusing lately. Here's a guide to know where you stand.
At the same time, some borrowers are struggling to get their loan servicers on the phone, making it hard to find answers to their questions, said Abrams.
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If you're a student loan borrower, here are some answers to your questions.
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What if I want to enroll in an income-driven repayment plan?
Applications for income-driven repayment plans are open, but they're taking longer than usual to process.
The applications were temporarily shut down earlier this year after a federal court in Missouri blocked the SAVE plan, a Biden administration plan that offered a faster path to loan forgiveness. The judge's order also blocked parts of other repayment plans, prompting the Education Department to pause income-driven applications entirely.
Amid pressure from advocates, the department reopened the applications on May 10.
Borrowers can apply for the following income-driven plans: the Income-Based Repayment Plan, the Pay as You Earn plan and the Income-Contingent Repayment plan.
Abrams expects applications will continue to be approved but at a slower pace than before the application pause.
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Borrowers currently enrolled in an income-driven plan should be receiving notifications about recertification, said Khandice Lofton, counsel at the Student Borrower Protection Center. Recertification is required annually to update information on family size and income, and dates are different for each borrower.
To review income-driven repayment plans, you can check the
What if I applied to the SAVE plan?
Borrowers enrolled in the SAVE plan have been placed in administrative forbearance while a legal challenge is resolved. That means they don't have to make payments and interest is not accruing. Time in forbearance normally does not count toward Public Service Loan Forgiveness.
The Education Department will notify borrowers with updates on payments and litigation.
'We don't know for sure when the SAVE forbearance is going to end,' Abrams said.
While the future of the SAVE plan is decided in court, Abrams encourages borrowers to explore their eligibility for other income-driven repayment plans.
What if I want to consolidate my student loans?
The online application for loan consolidation is available again, at
The consolidation process typically takes around 60 days to complete. You can only consolidate your loans once.
What if my loan was forgiven?
It would be difficult for the Education Department to reinstate loans that were canceled during President Joe Biden's administration. So far, it isn't believed to be happening, Abrams said.
What about the Public Service Loan Forgiveness program?
Nothing has changed yet.
President Donald Trump wants to change the Public Service Loan Forgiveness program to disqualify workers of nonprofit groups deemed to have engaged in 'improper' activities. He signed an executive order to that effect, but it has yet to be enforced.
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Borrowers enrolled in PSLF should keep up with payments to make progress toward loan forgiveness, said Sarah Austin, policy analyst at the National Association of Student Financial Aid Administrators.
'There could be some changes coming in regards to PSLF but at this current time PSLF is still functioning and there is still loan forgiveness being processed under the PSLF provision,' said Austin.
An income-driven repayment tracker has disappeared from the federal student loan website for many borrowers, said Abrams. For keeping track of their status, Abrams is recommending that borrowers take screenshots of their payments.
What if I can't get a hold of my loan servicer?
Contacting your loan servicer is crucial to managing and understanding your student loans. Due to the large number of people trying to get answers or apply for programs, loan servicers are taking longer than usual to respond.
Abrams recommends borrowers prepare for long wait times.
'We've heard borrowers being in hold for three or four hours, then being transferred to a supervisor and then being hung up on, after all that wait time. It's incredibly frustrating,' Abrams said.
What can I do if I'm delinquent on my student loans?
If you're delinquent, try to get back on track. Borrowers who don't make their payments for 270 days go into default, which has severe consequences.
'If you're delinquent but have not defaulted yet, do whatever you can do to avoid going default,' said Kate Wood, a student loans expert at NerdWallet.
Borrowers who are delinquent on their student loans take a massive hit on their credit scores, which could drop 100 points or more, Wood said. A delinquency stays on your credit report for seven years.
Wood recommends contacting your servicer to ask for options, which can include forbearance, deferment or applying for an income-driven repayment plan.
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What if I'm in default on my student loans?
The Education Department is recommending borrowers visit its Default Resolution Group to make a monthly payment, enroll in an income-driven repayment plan or sign up for loan rehabilitation.
Betsy Mayotte, president of The Institute for Student Loan Advisors, recommends loan rehabilitation.
Borrowers in default must ask their loan servicer to be placed into such a program. Typically, servicers ask for proof of income and expenses to calculate a payment amount. Once a borrower has paid on time for nine months in a row, they are taken out of default, Mayotte said. A loan rehabilitation can only be done once.
What happened to Fresh Start?
The Fresh Start program was a one-time temporary program that helped borrowers get out of default. This program ended Aug. 31, 2024.
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Forbes
38 minutes ago
- Forbes
Student Loan Forgiveness: Here's Who's Impacted By Latest Trump Changes
The Trump administration published proposed regulations this week that seek to limit which public service employees can have their student loans forgiven, one of several ways the Trump administration has taken steps in recent months to restrict loan forgiveness after the Biden administration significantly expanded it. Student loan borrowers gather near The White House on May 12, 2020 in Washington, DC. Getty Images for We, The 45 Million The Education Department published new rules in the Federal Register on Monday that restrict employers from participating in Public Service Loan Forgiveness (PSLF) if they're engaged in 'illegal activities,' after President Donald Trump signed an executive order targeting the forgiveness program in March. The regulations propose disqualifying employers that would otherwise qualify for PSLF on the basis of things like promoting gender-affirming care for minors or committing 'violence for the purpose of obstructing or influencing government policy,' raising concerns among critics that it will be used against Democratic-leaning organizations, governments in 'sanctuary cities' or groups that otherwise promote left-leaning policies. Borrowers eligible for student loan forgiveness under Income-Based Repayment (IBR) plans are also now in limbo after the Trump administration paused forgiveness under that program earlier this summer, a change that it has said is temporary. Student loan forgiveness under multiple other repayment plans had already been on hold due to court orders—including under the Saving On A Valuable Education (SAVE), Pay As You Earn (PAYE) and Income-Contingent Repayment (ICR) plans—but Democrats have questioned the necessity of pausing IBR forgiveness, given that it's not affected by the court rulings directly. The reconciliation bill Trump signed into law in July, known as his 'Big Beautiful Bill,' also makes some changes to student loan forgiveness as part of its broader overhaul of how student loans are allocated and repaid. The rules published Monday in the Federal Register disqualify employers who are otherwise eligible for PSLF from participating in the program anymore if the administration determines their activities have a 'substantial illegal purpose.' PSLF allows borrowers to have their loans forgiven faster if they work in public service occupations, which includes private nonprofits as well as the government or other public institutions. The specific categories of 'illegal' activities that the federal rules specify are 'aiding and abetting' offenses against the U.S.; 'chemical and surgical mutilation' of minors, specifically in states with laws banning gender-affirming care for minors; being or supporting a 'foreign terrorist organization'; committing 'illegal discrimination'; violating federal immigration laws; 'trafficking' minors for the purpose of emancipating them from their guardians and 'violence for the purpose of obstructing or influencing federal policy.' The broad nature of those definitions has sparked concern that they could be used to punish Democratic-leaning organizations that focus on topics like transgender rights or supporting undocumented immigrants. The Institute for College Access and Success suggested the White House could also deny forgiveness to government employees working for any 'sanctuary' cities or states that don't cooperate with federal immigration authorities, or universities the Trump administration has previously targeted for partnering with diversity initiatives. The rules would give the secretary of education, a Trump appointee, broad discretion to determine which employers are acting 'illegally' and should be disqualified from PSLF. How Would The Changes Impact Borrowers? The changes to PSLF have not been finalized yet, with the publication in the Federal Register on Monday kicking off a 30-day public comment period through Sept. 17, in which members of the public can submit thoughts on the new policy. If the policy goes through, it will take effect starting July 1, 2026, and the education secretary could broadly either disqualify existing employers who participate in PSLF, or determine any new organizations that apply for the program aren't eligible because of their purportedly 'illegal' activities. Employers can challenge their disqualification and be let back into the program if the education secretary approves a 'corrective action plan' that puts them in line with the federal policy, and employers can also be eligible to rejoin the PSLF program 10 years after the secretary disqualified them. The rules do not give borrowers working for the employer any recourse to challenge them being cut off from PSLF if their workplace is disqualified, however, meaning that employees would have to find another job with a different employer eligible for PSLF in order to keep working toward loan forgiveness under the program. The rules will apply to any student loan payments made after July 1, 2026, so borrowers working for disqualified employers will not have any of their payments counted toward loan forgiveness if they're made after that date. The new rules are likely to face legal challenges, however, so it's possible the changes could be blocked in court temporarily or permanently. The Trump administration noted in late July that loan forgiveness under IBR had been temporarily halted, after borrowers had already reported forgiveness under the plan being delayed, and it's unclear when it will resume. IBR plans are one of a few different kinds of payment plans that are based on a borrower's income, and is the main one that was not affected by a court ruling that broadly halted other income-driven plans set up under the Biden administration. Ellen Keast, deputy press secretary at the Education Department, told Forbes in a statement Wednesday that forgiveness had been paused because a court ruling impacting other student loan repayment plans affects how loan forgiveness amounts are calculated under IBR, and 'IBR discharges will resume as soon as the Department is able to establish the correct payment count.' Sen. Bernie Sanders, I-Vt., and Democratic senators sent a letter to Education Secretary Linda McMahon on Monday asking for more information about the pause, arguing the Trump administration's failure to to provide a clear timetable about how long it will last is 'alarming considering many borrowers have already been waiting months for relief.' Keast told Forbes that borrowers who become eligible for forgiveness while the program is on pause and keep making payments will have any overpayments refunded. Other Student Loan Forgiveness—including Save, Paye And Icr Plans—also On Hold The Trump administration's decision to halt IBR comes as borrowers have already been denied forgiveness under the SAVE, PAYE and ICR plans, after a federal court ruled in February against the SAVE Plan and also blocked forgiveness through those other income-centric repayment plans. That litigation is still moving forward in court, so it's possible there could be more changes on the program's status in the future. Also tied up in court is forgiveness under programs that allow borrowers to have their loans discharged if their school closed or defrauded them. The Supreme Court will hear that case during its upcoming term and issue a decision by June 2026, but the Education Department is not processing applications for forgiveness in the meantime. How Does Trump's 'big Beautiful Bill' Impact Student Loan Forgiveness? 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Borrowers are still generally able to get loan forgiveness through ICR plans—whenever that resumes—and through PSLF, though court filings suggest there's a substantial backlog of applications the Education Department is trying to work through. Borrowers can also submit applications for forgiveness if their schools closed or defrauded them, but the applications will not be processed unless the Supreme Court upholds the programs as they now stand. If the court rules against the Education Department, which is arguing the rules should remain in place, borrowers would only be able to use their school defrauding them as a defense if they default on their loans, rather than to proactively seek forgiveness. Other loan forgiveness programs that so far remain intact are those for teachers, people with total and permanent disabilities, members of the military and some people who complete AmeriCorps programs. Student loan forgiveness has emerged as a major political debate in recent years, as Democrats like Sen. Elizabeth Warren, D-Mass., have pushed for broad debt relief and made it a key campaign issue. While former President Joe Biden did not go as far as some on the left wanted in backing total student loan relief, his White House undertook a number of efforts to relieve borrowers' debt, including more piecemeal measures that targeted specific groups and a broader plan for loan forgiveness for tens of millions that the Supreme Court ultimately struck down. Republicans have heavily protested the forgiveness plans and challenged Biden's programs in court, leading to many of the court rulings that have now put forgiveness programs on hold. The Trump administration has also vowed to curb the government's spending on student loan forgiveness, with McMahon saying in April that 'American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies.' 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Yahoo
4 hours ago
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Trump set to bar college graduates from debt relief program if employers undermine ‘American values'
Donald Trump's administration is considering introducing a new rule that would block college graduates with outstanding loans from having their debt forgiven if their employers are found to be 'undermining national security and American values through illegal means.' The proposal, announced this week by the Linda McMahon-led Department for Education, would bar people from being considered for the federal Public Student Loan Forgiveness program if the businesses they work for engage in 'activities with a substantial illegal purpose.' The examples given by the DOE of what offenses might qualify include 'supporting terrorism, aiding or abetting discrimination or violations of immigration laws, or child abuse.' Announcing the draft rule change proposal, Under Secretary of Education Nicholas Kent said: 'President Trump has given the department a historic mandate to restore the Public Service Loan Forgiveness program to its original purpose – supporting public servants who strengthen their communities and serve the public good, not benefiting businesses engaged in illegal activity that harm Americans. 'The federal government has a vital interest in deterring unlawful conduct, and we're moving quickly to ensure employers don't benefit while breaking the law.' The PSLF was first introduced in 2007 under George W Bush with the intention of rewarding graduates who enter public service professions like teaching or law enforcement by relieving them of the burden of student debt at the outset of their careers. The DOE insists the rule change it is pitching is necessary to preserve the original spirit of the taxpayer-funded program while penalizing companies found to be operating outside of the law. It is now soliciting public comments on its proposal until September 17. According to CBS News, critics of the revision have already warned that it would open the door to DOE officials moving to 'improperly exclude' public servants from the scheme on ideological grounds. In advance of the draft proposal being published, the Student Borrower Protection Center campaign group slammed it last month as 'harmful, horrific, and illegal,' warning it could empower the Trump administration to persecute agencies and firms whose work or ethos conflicts with its own goals. 'To be clear, if implemented this proposal would allow the secretary to disqualify from PSLF any employees of school systems that accurately teach the U.S.'s history of slavery, of healthcare providers who offer gender-affirming care and of legal aid organizations that represent individuals against unlawful deportations,' said the SBPC's legal director Winston Berkman-Breen in late June. The Independent has reached out to the DOE for further comment. Earlier this month, Homeland Security Secretary Kristi Noem offered student loan forgiveness as an incentive to encourage graduates to apply to join ICE as part of a massive recruitment drive to boost the administration's crackdown on undocumented migrants.
