Latest news with #ElaineRubin
CNET
3 days ago
- Business
- CNET
Yes, Student Loan Payments Could Rise for SAVE Borrowers. Here's How to Calculate Yours
If you're enrolled in the Saving on a Valuable Education repayment plan, expect your student loan payments to increase. Getty Images/CNET If you're one of the eight million student loan borrowers enrolled in the Saving on a Valuable Education (SAVE) plan, you may have seen student loan payments as low as $0. With the SAVE plan officially struck down, you might be worried about how much you'll be required to pay in the future. Although the Department of Education offers several other income-driven repayment plans, which cap your monthly bill at a percentage of your discretionary income, SAVE was the most affordable repayment plan to date. That means you should expect a higher monthly payment in the future. "The payment is likely going to go up for borrowers enrolled in SAVE," said Elaine Rubin, a student loan policy expert for Edvisors and CNET Money expert review board member. The earliest SAVE borrowers are expected to restart payments is December of this year, according to the Department of Education. However, many experts think the pause will last even longer, through mid-2026. While the forbearance remains in effect, here's how to calculate how much your monthly payment could increase. What are my payment options when SAVE ends? With SAVE off the table, you'll eventually need to switch to another repayment plan. You currently have three other options for income-driven repayment: Income-Based Repayment, Pay As You Earn and Income-Contingent Repayment. "Each plan has its own eligibility rules and repayment formula," says student loan lawyer Adam Minsky. "Many borrowers will have higher monthly payments under these plans compared to the SAVE plan." Alternatively, you could choose a plan that doesn't base payments on your income. These include the standard plan, graduated repayment and extended repayment. If you're enrolling in the Public Service Loan Forgiveness plan, you'll need to choose an income-driven repayment plan and not a standard plan. How much could my student loan payment increase? Most SAVE borrowers will see their payments increase on other payment plans, including IDRs. How much they might increase varies based on your income, household size and debt. To help you get an idea of how much your student loan payment might rise when the SAVE payment pause ends, I reviewed different options available for a single filer who makes $60,000 a year and has a $30,000 student loan balance at a 6.53% interest rate, using Federal Student Aid's Loan Simulator tool. Under SAVE, you would pay approximately $217 per month or less. Under other plans, you could see your payments rise from $70 to $370 per month. There are two situations where you could lower your monthly payment, but you'd be nearly doubling the amount you'd pay over the lifetime of your loan. Here's what it looks like. Income-Contingent Repayment The Income-Contingent Repayment plan sets your monthly payments to 20% of your discretionary income or what you'd pay on a fixed 12-year plan, whichever is less. Using the $30,000 loan example, here's what repayment would look like on ICR: Monthly payment: $290 Total to be paid: $43,919 End of term date: September 2037 If you qualify for PSLF, you'd pay $35,389 on this plan before getting your remaining balance of $7,884 forgiven in April 2035. Income-Based Repayment The Income-Based Repayment plan sets your monthly payments to 10% of your discretionary income if you borrowed loans after July 1, 2014. If you borrowed before that date, your payment would be set to 15%. This plan has a cap on payments — if your income increases, your payments will never be higher than what you'd pay on the standard 10-year plan. Here's what the payments on that $30,000 loan would look like on IBR: Monthly payment: $312 Total to be paid: $41,473 End of term date: August 2035 If you qualify for PSLF, you'd pay $40,259 on this plan before getting your remaining balance of $1,198 forgiven in April 2035. Pay As You Earn The Paye As You Earn plan sets your payments to 10% of your discretionary income. Like IBR, your payments on PAYE will never go higher than what they'd be on the standard plan. According to the loan simulator, your payments would be the same on PAYE as on IBR based on the $30,000 loan example. Monthly payment: $312 Total to be paid: $41,473 End of term date: August 2035 This is the last plan on this list that qualifies for PSLF. The forgiveness amount would be the same as the IBR plan. Standard Repayment The standard plan doesn't base your payments on your income. It gives you a fixed payment over 10 years. Monthly payment: $341 Total to be paid: $40,932 End of term date: April 2035 Graduated Repayment The graduated repayment plan has you pay off your loans over 10 years, too. However, payments start out lower and increase every couple of years. While your payment would start out lower, you'll see it jumps significantly over time. This plan is best for anyone starting out in a new career who expects to make significantly more money as they progress. Monthly payment: $196 - $589 Total to be paid: $43,916 End of term date: April 2035 Extended Repayment You can qualify for this plan if you owe at least $30,000. It has fixed payments and spans 25 years. You'd see a lower monthly payment with this plan, but since you're spreading out your payments over two and a half decades, you'll end up paying double the amount you borrowed. Monthly payment: $203 Total to be paid: $60,937 End of term date: April 2050 Note: The above payment options could change in the future. Republicans on the House Education Committee recently introduced a proposal that would eliminate many of the plans above for new borrowers and replace them with two options: a Standard Repayment Plan and a Repayment Assistance Plan. The standard plan would have fixed payments ranging from 10 to 25 years, while the Repayment Assistance Plan would base payments on a borrower's total adjusted gross income and waive monthly unpaid interest. Could I save money by refinancing with a private student loan? Refinancing a loan can be helpful for creditworthy borrowers who can qualify for a low interest rate -- but experts generally warn against refinancing if you have federal student debt. Rubin doesn't recommend refinancing if you're counting on federal student loan benefits, working toward PSLF, enrolled in an income-driven repayment plan or living paycheck-to-paycheck. For most borrowers who were enrolled in SAVE, refinancing with a private lender won't make sense. "Even if you're comfortably making payments, if something were to happen, you might find yourself locked into a very challenging situation," Rubin previously told CNET. When you refinance with a private lender, you're giving up your federal student loan benefits. That means you won't qualify for financial hardship assistance, federal payment pauses, federal loan forgiveness or similar benefits. Once you've refinanced with a private lender, you can't reverse the process. How to prepare for a higher student loan payment Borrowers in SAVE may not have owed any money on their student loans since March 2020 when the first federal forbearance period started. As SAVE makes its way through the courts, experts expect repayment to resume at the end of this year or sometime in 2026. Depending on your income and family size, that could mean fitting a sizable bill into your monthly budget. To prepare for that, Rubin recommends: Use the Department of Education's loan simulator to estimate the size of your monthly payment. Speak with a trusted, nonprofit source, such as Edvisors or The Institute of Student Loan Advisors, for advice on applying for and choosing the best repayment plan for your financial circumstances. Talk to a student loan advisor and an accountant about potential tax strategies to lower your adjusted gross income (used to calculate payments in some cases). Review your current finances to find places to cut or move costs (for instance, eliminating subscriptions, slowing other debt repayment or reducing your savings contributions).
Yahoo
25-05-2025
- Business
- Yahoo
How Much Could Student Loan Payments Skyrocket for SAVE Borrowers? We Did the Math
About 8 million federal student loan borrowers had hopes of smaller monthly payments and lower lifetime costs when the Biden administration rolled out the Saving on a Valuable Education (SAVE) repayment plan in 2023. But with SAVE officially shot down, you may be worried about how your monthly payments could change. Under income-driven repayment (IDR) plans, many borrowers who fell below certain income levels have had their payments lowered to $0 per month since March 2020. The new formula for monthly payments under SAVE would have extended that reality to millions more. With SAVE's demise, borrowers already in SAVE stand to see increases in their monthly payments. "The payment is likely going to go up for borrowers enrolled in SAVE," confirmed Elaine Rubin, a student loan policy expert for Edvisors and CNET Money expert review board member. Experts don't expect the payment pause to lift any sooner than December of this year, and some predict borrowers won't be required to make payments until mid-2026. Regardless of when payments resume, you should be prepared to face higher monthly payments. With SAVE off the table, you'll eventually need to switch to another repayment plan. You currently have three other options for income-driven repayment: Income-Based Repayment, Pay As You Earn and Income-Contingent Repayment. "Each plan has its own eligibility rules and repayment formula," says student loan lawyer Adam Minsky. "Many borrowers will have higher monthly payments under these plans compared to the SAVE plan." Alternatively, you could choose a plan that doesn't base payments on your income. These include the standard plan, graduated repayment and extended repayment. If you're enrolling in the Public Service Loan Forgiveness plan, you'll need to choose an income-driven repayment plan and not a standard plan. Most SAVE borrowers will see their payments increase on other payment plans, including IDRs. How much they might increase varies based on your income, household size and debt. To help you get an idea of how much your student loan payment might rise when the SAVE payment pause ends, I reviewed different options available for a single filer who makes $60,000 a year and has a $30,000 student loan balance at a 6.53% interest rate, using Federal Student Aid's Loan Simulator tool. Under SAVE, you would pay approximately $217 per month or less. Under other plans, you could see your payments rise from $70 to $370 per month. There are two situations where you could lower your monthly payment, but you'd be nearly doubling the amount you'd pay over the lifetime of your loan. Here's what it looks like. The Income-Contingent Repayment plan sets your monthly payments to 20% of your discretionary income or what you'd pay on a fixed 12-year plan, whichever is less. Using the $30,000 loan example, here's what repayment would look like on ICR: Monthly payment: $290 Total to be paid: $43,919 End of term date: September 2037 If you qualify for PSLF, you'd pay $35,389 on this plan before getting your remaining balance of $7,884 forgiven in April 2035. The Income-Based Repayment plan sets your monthly payments to 10% of your discretionary income if you borrowed loans after July 1, 2014. If you borrowed before that date, your payment would be set to 15%. This plan has a cap on payments — if your income increases, your payments will never be higher than what you'd pay on the standard 10-year plan. Here's what the payments on that $30,000 loan would look like on IBR: Monthly payment: $312 Total to be paid: $41,473 End of term date: August 2035 If you qualify for PSLF, you'd pay $40,259 on this plan before getting your remaining balance of $1,198 forgiven in April 2035. The Paye As You Earn plan sets your payments to 10% of your discretionary income. Like IBR, your payments on PAYE will never go higher than what they'd be on the standard plan. According to the loan simulator, your payments would be the same on PAYE as on IBR based on the $30,000 loan example. Monthly payment: $312 Total to be paid: $41,473 End of term date: August 2035 This is the last plan on this list that qualifies for PSLF. The forgiveness amount would be the same as the IBR plan. The standard plan doesn't base your payments on your income. It gives you a fixed payment over 10 years. Monthly payment: $341 Total to be paid: $40,932 End of term date: April 2035 The graduated repayment plan has you pay off your loans over 10 years, too. However, payments start out lower and increase every couple of years. While your payment would start out lower, you'll see it jumps significantly over time. This plan is best for anyone starting out in a new career who expects to make significantly more money as they progress. Monthly payment: $196 - $589 Total to be paid: $43,916 End of term date: April 2035 You can qualify for this plan if you owe at least $30,000. It has fixed payments and spans 25 years. You'd see a lower monthly payment with this plan, but since you're spreading out your payments over two and a half decades, you'll end up paying double the amount you borrowed. Monthly payment: $203 Total to be paid: $60,937 End of term date: April 2050 The above payment options could change in the future. Republicans on the House Education Committee recently introduced a proposal that would eliminate many of the plans above for new borrowers and replace them with two options: a Standard Repayment Plan and a Repayment Assistance Plan. The standard plan would have fixed payments ranging from 10 to 25 years, while the Repayment Assistance Plan would base payments on a borrower's total adjusted gross income and waive monthly unpaid interest. Refinancing a loan can be helpful for creditworthy borrowers who can qualify for a low interest rate -- but experts generally warn against refinancing if you have federal student debt. Rubin doesn't recommend refinancing if you're counting on federal student loan benefits, working toward PSLF, enrolled in an income-driven repayment plan or living paycheck-to-paycheck. For most borrowers who were enrolled in SAVE, refinancing with a private lender won't make sense. "Even if you're comfortably making payments, if something were to happen, you might find yourself locked into a very challenging situation," Rubin previously told CNET. When you refinance with a private lender, you're giving up your federal student loan benefits. That means you won't qualify for financial hardship assistance, federal payment pauses, federal loan forgiveness or similar benefits. Once you've refinanced with a private lender, you can't reverse the process. Borrowers in SAVE may not have owed any money on their student loans since March 2020 when the first federal forbearance period started. As SAVE makes its way through the courts, experts expect repayment to resume at the end of this year or sometime in 2026. Depending on your income and family size, that could mean fitting a sizable bill into your monthly budget. To prepare for that, Rubin recommends: Use the Department of Education's loan simulator to estimate the size of your monthly payment. Speak with a trusted, nonprofit source, such as Edvisors or The Institute of Student Loan Advisors, for advice on applying for and choosing the best repayment plan for your financial circumstances. Talk to a student loan advisor and an accountant about potential tax strategies to lower your adjusted gross income (used to calculate payments in some cases). Review your current finances to find places to cut or move costs (for instance, eliminating subscriptions, slowing other debt repayment or reducing your savings contributions).
CNET
13-05-2025
- Business
- CNET
Student Loan Delinquencies Have Doubled. How to Get Back on Track Even if You're Falling Behind
Getty Images/Zooey Liao/CNET Getting back into the swing of paying student loans isn't easy. That's especially true if your life has changed. Maybe you switched jobs, had children, increased your living expenses or took on other debts. That may be the case for many student loan borrowers, whose payments resumed after a five-year pause. I wasn't too surprised that a new study by TransUnion showed that more than 20% of federal student loan borrowers were late on their payments by 90 days or more -- also known as delinquent -- as of February 2025. That's nearly double what TransUnion reported (11.5%) in 2020, just before the start of the pandemic. The big question is, why are there more delinquencies since repayment has resumed? Failing to pay federal student loans can lead to serious consequences. Regardless of the reason, if you're delinquent, in default or struggling to pay, there are ways to get back on track. Here's what to do if you're behind on your student loan payments. Why borrowers are falling behind on their student loans "Unfortunately, many borrowers fell out of the habit of repaying their debt because of pandemic relief and the SAVE Plan forbearance." Elaine Rubin, student loan expert There have been a lot of student loan changes over the past few years, including the initial pause on payments that was extended multiple times until Sept. 1, 2023, when payments resumed. The pandemic initially resulted in widespread layoffs and soaring inflation. And now there are concerns about what looming tariffs could have on prices. Over that time, Elaine Rubin, student loan expert and Edvisors Corporate Communications Director, said many borrowers fell out of the habit of repaying because of pandemic relief and the SAVE Plan forbearance. "While it was understood that these relief options were not permanent, being offered relief for years makes it hard for a borrower to add student loan payments back into their budget," Rubin said. Failure to repay student loan debt may have to do with habits, according to Charlie Wise, TransUnion's senior vice president of global research and consulting. "They don't have the ability to now resume making those payments," Wise said. "They're maxed out." On the other hand, millions of recent graduates have never had to get in the habit of making a payment, so budgeting for a new bill can be a "new muscle they need to build," he said. Additionally, Wise noted that there could be issues with student loan servicers' ability to reach borrowers so they can resume payments. Servicers may not have updated addresses, and borrowers may have lost track after being transferred to a new servicer over the years. How a student loan delinquency can affect your credit First, it's important to note that your federal student loans become delinquent if you're even one day late with your monthly payment. But servicers don't report delinquent loans to the credit bureaus until they're 90 days past due, so if you're within that window, you can repay the past due amount or reach out to your servicer for options to avoid having it affect your credit. If you're already behind on student loan payments, ignoring the situation will only make things worse. Loans that are 270 days past due go into default, and the consequences can become much more severe. Defaulted borrowers have seen their credit scores decline by an average of 63 points, according to a TransUnion's analysis. Super prime borrowers, who have a credit score of 800 or higher, saw an average 175-point decrease. The Office of Federal Student Aid resumed sending defaulted student loan accounts to collections on May 5. It's already begun informing borrowers that they could have their tax refund and government benefits withheld and wages garnished. "Consumers need to realize that these obligations are very real, the government is very serious about resuming repayments," Wise said. "This is an obligation that I don't think the government's going to say just walk away from." That means now's the time to make a plan to fit the payments into your budget to protect your credit score and borrowing options in the future. What to do if you're behind on student loan payments Your first step should be to find out the status of your loans, which you can do at or by reaching out to your servicer. If you discover you're mistakenly designated as delinquent but you're in a repayment or forbearance program, reach out to your servicer immediately. If your loans are correctly classified as delinquent, the fastest and best way to get your loans current is to pay the past due amount on the loans. However, this may not be realistic if you're struggling financially, but there are additional options. You may need to consider a deferment or forbearance, which can help resolve a past-due delinquency if the loan is not already in default. "Typically, these options are considered last resort, but they can be helpful options to avoid falling behind or defaulting on a loan," Rubin said. Both deferment and forbearance offer temporary postponements on your payments, but interest may still accrue. That could put you further behind on paying off your balance and increase your monthly payment when you exit either plan. If you're struggling to make your current monthly payment, Rubin recommends exploring all of your federal student loan repayment plan options. "IDR plans typically offer the lowest monthly payment for many borrowers, [but] that will not be true for everyone," Rubin said. If you need help getting back on track to make your student loan payments, Rubin recommends reviewing your household budget and making decisions that prioritize your necessities and debt obligations. You may look for ways to cut costs, like negotiating other bills or using a no-spend month to give you time to reevaluate your budget. Wise pointed out that figuring out a way to make on-time payments can help get your credit back on track quickly. "It may require a change in lifestyle. It may require you to cut back in some areas, but if you have aspirations of buying a home or buying a vehicle or making other major financial plans in the near future, having a good credit score is going to be critical," Wise said.
CNET
10-05-2025
- Business
- CNET
Refinancing Your Student Loans With a Private Lender Only Makes Sense in This One Situation
Pla2na/CNET With wage garnishment for defaulted student loans starting up this summer and SAVE borrowers gearing up for higher monthly payments, you might be considering a private student loan as a more affordable way to pay down your debt. Private student loan companies have been advertising tempting offers for anyone struggling to afford monthly payments. SoFi, for example, unveiled SmartStart, a new refinancing program designed to help ease borrowers into the repayment process by only requiring them to pay interest for the first nine months. Another loan company, Earnest, offers benefits like the ability to skip a monthly payment, if needed. But student loan experts warn borrowers to be cautious before refinancing with any private lender. "I get asked this question a lot," said Elaine Rubin, a student loan policy expert at Edvisors. "Typically, it is not recommended to refinance with a private lender for a federal student loan." Rubin admits there is an exception, though. Here's when it makes sense to refinance your student loans with a private lender, and alternatives you can explore if refinancing is too risky for you. Read more: There's Still Time to Stop Your Wages From Being Garnished for Defaulted Student Loans When financing with a private student loan servicer makes sense There's one specific type of borrower who could benefit from refinancing federal student debt, said Rubin. "An extremely financially stable individual who wants to repay a loan quickly and secure a lower interest rate might find this option appealing," said Rubin. "This would typically apply to someone who cannot pay off the loan immediately but plans to do so within a few years." Some examples Rubin provided are a dentist or doctor who earns enough to more than comfortably afford their student loan payments, but can't pay off the full balance just yet. Refinancing could help them lock in a lower interest rate and save on interest charges, in certain cases. Even if you fall into this category, you should always compare rates and terms from different private lenders to make sure you're getting the best offer. It may not make sense to refinance if you find you'll pay less over time with your federal student loan repayment plan. Why refinancing your student debt with a private lender is risky For everyone else, Rubin recommends steering clear of private lender refinancing offers, especially if you're enrolled in an income-driven repayment, pursuing public student loan forgiveness or living paycheck-to-paycheck. You'll be giving up too many benefits and could land in a dangerous situation if you face financial hardship, like a job loss or medical issue. Here are some other caveats to consider. 1. You'll lose federal student loan protections Refinancing to a private lender means you won't have access to federal student loan benefits, such as access to income-driven repayment plans, administrative forbearances and any future federal student loan forgiveness opportunities. "Some lenders in the Family Federal Education Loan program provide discounts for borrowers who make their loan payments on time without missing a payment," Kantrowitz said. Federal student loans also offer hardship benefits, such as loan deferment and forbearance, which can keep your loans in good standing for a period of time when you're unable to make payments. Private student loans may offer some hardship assistance but don't offer the same benefits. 2. You may pay more in interest and fees If you're able to get a lower monthly payment, you'll likely be extending your loan's repayment term -- this means you'll be paying off your debt for a longer time. Even if your interest rate is lower, you could end up paying more in interest and other fees. That means you'll make debt payments for longer, which could hold you back from growing your savings, putting money away for a down payment on a house or car, or getting approved for a mortgage or other loan. 3. You might not qualify for the advertised interest rate You might see a private lender advertising rates or rate discounts that are lower than your current federal student loan interest rate -- but that doesn't mean you'll qualify for them. Most lenders require good to excellent credit to lock in the best rates. If your credit score isn't in the mid-to-high 700s, your rate will likely be higher. Before applying with a private servicer see if you can get pre-qualified so you have an idea of what your rate will be. Otherwise, you may need a cosigner to qualify for a lower rate. 4. Your credit score may be too low When you refinance, you're essentially moving your debt from one loan to a new one. Refinancing still means you'll need to meet lender requirements, including credit requirements. Some lenders require a 665 or better to get approved for a loan. If you're already in default on your student loans, it will be challenging to refinance your loans with a private lender -- you'll likely need a cosigner, said Rubin. Alternatives to refinancing your student loan debt If you're struggling to repay your student loans, you have a few options you can explore before you consider refinancing. Talk to your loan servicer. If you're at risk of falling behind on your student loans, contact your student loan servicer as soon as possible for any alternative repayment or hardship options to avoid going into default. If you're at risk of falling behind on your student loans, contact your student loan servicer as soon as possible for any alternative repayment or hardship options to avoid going into default. See if you qualify for lower monthly payments. Check out all of the repayment options available to you, including income-driven repayment plans, using the Department of Education's Loan Simulator. Check out all of the repayment options available to you, including income-driven repayment plans, using the Department of Education's Loan Simulator. Consider consolidating your loans. If you have multiple loans with different interest rates, you may qualify to consolidate them into one direct loan with one interest rate. This could also help lower your interest rate or overall monthly payment. If you have multiple loans with different interest rates, you may qualify to consolidate them into one direct loan with one interest rate. This could also help lower your interest rate or overall monthly payment. Look into loan rehabilitation. If your loans are in default, you can avoid having your wages garnished. The Office of Federal Student Aid offers loan rehabilitation, which can get your loans out of bad standing if you make nine consecutive payments on time under the agreement.
CNET
08-05-2025
- Business
- CNET
What's Going on With Your Student Loans? An Expert Answers Your Top Payment and Forgiveness Questions
Borrowers are left with unanswered questions in the wake of several student loan policy shifts. The Washington Post via Getty; Design by Zooey Laio/CNET Student loan policy has experienced extreme shifts in the past few years, and we may not have seen the last of these changes yet. In the past four months we've witnessed the end of the Saving on a Valuable Education (SAVE) income-driven repayment plan, and borrowers with defaulted student loan balances now face wage garnishment. President Trump's administration has also cut staffing at the Department of Education, proposed moving federal student loan balances to the Small Business Association and is considering new payment calculations for future borrowers. There are also a lot of outstanding questions and Reddit has been awash with panicked questions. What will payments look like for current SAVE borrowers? How will any of this work? Does it make sense to switch to a private lender? And when will teachers, nurses and other public servants who've satisfied the terms of the Public Service Loan Forgiveness (PSLF) program see loan discharges? All of this news can feel out of your control. I get it. I've covered student loans since the beginning of the pandemic, and as a borrower myself, it's a topic I'm dialed in on. Yet even I'm finding it hard to keep track of all the new proposals. I talked to student loan expert and Edvisors Corporate Communications Director, Elaine Rubin, to help answer some of your most pressing questions. How will the new student loan proposal impact current borrowers? Last week, Republicans put forth a new bill that would change the way student loan payments are calculated and repaid. The proposal hasn't yet been approved by Congress, and it's unclear whether any of the rules in this document will be finalized. If the bill were to pass, borrowers with loans issued before July 1, 2026, wouldn't see many changes, unless they're enrolled in the income-contingent repayment plan. Borrowers on ICR would be moved to income-based repayment, and their monthly bill would be capped at 15% of their discretionary income. Should SAVE borrowers move to another IDR? You may have heard that payments will be restarting soon for SAVE borrowers, which can be confusing, since your monthly payment will likely change. You can apply for another income-driven repayment plan if you've found one that's a good fit, but Rubin said there's no action you need to take right now. Since it's likely you'll either be moved to another payment plan or given a window of time to select a new repayment plan, exploring other IDRs can help you calculate your new monthly payment. You can check out your repayment options using the student loan simulator at What's happening to the Public Service Loan Forgiveness plan? Teachers, nurses and other public servants enrolled in the Public Service Loan Forgiveness Plan (PSLF) have been on an even more tumultuous ride in the past few years. After President Joe Biden's administration expanded PSLF to ensure more borrowers would receive forgiveness, the program was moved in-house to the Department of Education, causing a variety of delays. Earlier this year, President Donald Trump announced some changes in eligibility for the PSLF, preventing anyone working for an organization deemed illegal from receiving forgiveness, but no official changes have been made to the program, according to Is forgiveness still possible through the PSLF program? Yes, the Public Service Loan Forgiveness program is still offering debt relief to eligible borrowers. However, don't expect quick processing times. Some borrowers on Reddit have said they've met the forgiveness requirements but have yet to receive debt relief through either the PSLF or PSLF buyback program. "We've heard there have been delays in processing," Rubin said. "There are a lot of moving pieces in the background right now that are making it hard to estimate how quickly forgiveness will be granted." Whatever you do, Rubin warns not to stop making your monthly payments while you wait, as this could lead to other complications, such as wage garnishment while your forgiveness is being evaluated. Reach out to your loan servicer to figure out your best move while waiting for loan forgiveness, Rubin suggested. The servicer might be able to put your payments on hold or in forbearance in the meantime. Any extra money you pay should be returned to you in the form of a refund after your forgiveness is processed. What payment options do you have if your income has decreased? If you're on an income-driven repayment plan and your income has decreased, it can be helpful to recertify your income to see if your servicer will lower your monthly payment. Typically, the Department of Education requires borrowers to recertify their income annually. But this process has been on hold since the pandemic, with the expectation that it'll resume in 2026. To have your income recertified by the Department of Education, you'll need to fill out an application at and select the option "recertify or change your income-driven repayment plan." It could take some time to process your application, Rubin noted. "Until the actual process completes and the new payment is approved, the borrower does have to make their required original monthly payments." If your income has increased, there's no need to recertify until 2026. Is it better to refinance my student loans with a private lender? If you're panicked about possible wage garnishment or worried about a higher monthly student loan payment, you might've been exploring other options, such as refinancing your student debt with a private lender. Though it rarely makes sense for borrowers to switch from federal to private student loans, Rubin acknowledged that this option could make sense, but only for a very specific borrower. Rubin said borrowers like dentists or doctors, who earn higher incomes and wouldn't qualify for any of the benefits of IDR plans or other federal student loan offers, might benefit from refinancing with a personal loan -- in some cases. You'll want to review your interest rate and any loan fees before making this decision. For the large majority of borrowers, Rubin does not advise refinancing with a private student loan lender. You'll be forfeiting your federal borrower protections, benefits and potential forgiveness options. And once you refinance your federal student debt with a private lender, you can't ever move this debt back to the federal student loan program. "It's typically not recommended for borrowers who are relying or depending on an income-driven repayment plan," said Rubin, "I especially don't recommend it to anybody who's living paycheck to paycheck. Even if you're comfortably making payments, if something were to happen, you might find yourself locked into a very challenging situation." In addition, with many banks tightening their borrowing requirements, Rubin also said it could be an "extreme challenge" for borrowers to find a private student lender that would approve them for a refinancing loan. You'll typically need a high credit score and low debt-to-income ratio to qualify for the best terms. Instead of refinancing your debt with a private lender, Rubin said, borrowers should look into income-driven repayment plans, talk to their servicers about financial hardship, or consider loan consolidation if they qualify. Will my student loan account move to collections? On May 5, the Department of Education resumed efforts to begin collecting on defaulted student loan debt. If your loans are in default -- meaning you're 270 days or more past due on payments -- expect them to be moved to a collections agency. Once your account is moved to collections, you'll receive a letter from the Department of Education with steps to potentially get your loans out of default. If you do nothing, wage garnishment will begin in 30 days. Your wages could be garnished for up to 15% of your take-home pay. To avoid having your paycheck docked, you can apply for loan rehabilitation, where you voluntarily re-enter repayment and after nine consecutive on-time payments, your loans get pulled out of default. You may also be able to apply for loan consolidation if you have multiple loans with varying interest rates. Consolidating your existing federal loans into a new direct loan could lower your interest rate and monthly payments, making it more affordable to repay your debt. If you're behind on payments but not yet in default, try reaching out to your servicer to work out a payment agreement. You should also check to see if you qualify for an income-driven repayment plan that could lower your monthly bill.
