What to know about student loan repayment plans and collections
NEW YORK -- It's been a confusing time for people with student loans.Collections restarted, then were put on hold.
At the same time, borrowers had to stay on top of changes to key forgiveness plans.Last year, the long-contested SAVE plan introduced by the Biden administration ended with a settlement agreement.
President Donald Trump’s “Big Beautiful Bill” introduced new borrowing limits for graduates and raised challenges to the Public Service Loan Forgiveness program.While several changes for student loan borrowers will take effect this summer, other key questions remain unresolved.More than 5 million Americans were in default on their federal student loans as of September, according to the Education Department.
Millions are behind on loan payments and at risk of default this year.Borrowers "genuinely struggle to afford their loans and then to hear that the administration is making it more expensive and taking away some of the tools and resources that help folks afford their loans is really, it’s panic-inducing,” said Winston Berkman-Breen, legal director at Protect Borrowers.Last month, the Education Department announced that it would delay involuntary collections for student loan borrowers in default until the department finalizes its new loan repayment plans.The date for this is still unclear.
If you’re a student loan borrower, here are some key things to know:The SAVE plan was a repayment plan with some of the most lenient terms ever.Soon after its launch it was challenged in court, leaving millions of student loan borrowers in limbo.
Last December, the Education Department announced a settlement agreement to end the SAVE plan.What is next for borrowers who were enrolled in this repayment plan is yet to be determined.“Seven and a half million borrowers who are currently enrolled in SAVE need to be moved to another plan,” Berkman-Breen said.
As part of the agreement, the Education Department says it will not enroll new borrowers, deny pendi...