Student Loan Changes: What Borrowers Need to Know Now

After years of pandemic-related pauses, legal challenges, and shifting policy, federal student loan repayments are back. But if you’re feeling uncertain or overwhelmed by what’s changed—or wondering what steps to take—you’re not alone.

Whether you’ve continued paying all along or haven’t checked your balance since 2020, the landscape has shifted. From paused repayment plans to new income-based options and renewed collection efforts, many borrowers are navigating a system that’s different than the one they left.

This guide is here to help you understand the current environment, identify what applies to your situation, and take steps that align with your broader financial goals—whatever they may be.

Please consult your financial professional who is familiar with your particular situation as this information is meant to be educational and broad in nature not specific advice for your particular circumstances.

I. Step One: Reconnect With Your Loans and Credit Profile

No matter your loan status or repayment strategy, here are four steps every borrower may want to take:

1. Log in to your student loan servicer account (via StudentAid.gov if you’re unsure who your servicer is).
2. Check your repayment plan, loan balance, due dates, and current standing.
3. Review your credit report through AnnualCreditReport.com to catch any issues like missed payments or incorrect defaults.
4. Update your contact information so you don’t miss notices or account changes.
   

Whether you plan to resume payments, apply for forgiveness, or pay your loans off aggressively, this visibility is essential.

Key Terms You Should Know

Before we dive into borrower-specific guidance, here are a few important terms defined in plain language:

• Forbearance: A temporary pause or reduction in student loan payments, usually due to financial hardship or administrative action. Interest often continues to accrue during this period.
• Income-Driven Repayment (IDR) Plans: Plans that base monthly payments on income and family size. These include:
  • IBR – Income-Based Repayment
  • PAYE – Pay As You Earn
  • ICR – Income-Contingent Repayment
  • SAVE – Saving on a Valuable Education (paused as of February 2025 due to a court injunction)
• Public Service Loan Forgiveness (PSLF): A program that forgives the remaining balance after 120 qualifying payments made while working full-time for a qualifying public service employer.

II. Choose Your Path: Guidance Based on Your Situation

Whether your priority is minimizing monthly payments, accelerating payoff, qualifying for forgiveness, or simply regaining clarity—here’s a breakdown of what’s happening and what you might consider doing next.

If You Continued Making Payments

What to Know: You likely remained in good standing. While your balance may be lower, recent program updates or forgiveness opportunities may still apply.

Consider Exploring:

• Whether your payment history aligns with what's shown in your credit report and loan account.
• Whether you may qualify for PSLF or other forms of forgiveness.
• Whether a different repayment plan might better support your evolving goals.
  

If You Paused Payments During COVID Forbearance

What to Know: Most borrowers paused payments between 2020 and 2023. As of now, repayment is expected to resume unless you’ve made arrangements or qualify for a deferment.

Consider Exploring:

• What plan you're currently enrolled in—some borrowers were placed into a Standard 10-year plan automatically.
• Whether an IDR plan may offer terms more in line with your current income or priorities.
• How resuming payments might impact your credit, cash flow, or larger financial goals.
  

If You Enrolled in the SAVE Plan

What to Know: As of February 18, 2025, the SAVE Plan is paused due to a federal court injunction. Many borrowers in SAVE were automatically placed into administrative forbearance. While this protects from required payments, it may pause progress toward forgiveness.²

Consider Exploring:

• Whether you're currently in forbearance or another status—check your loan dashboard to confirm.
• If forgiveness is a goal (such as under PSLF), whether switching to a currently available IDR plan (like IBR, PAYE, or ICR) is beneficial.
• The potential implications of remaining in forbearance—including effects on interest accrual and qualifying payment counts.

If You’re Pursuing Public Service Loan Forgiveness (PSLF)

What to Know: PSLF requires 120 qualifying payments made under an eligible repayment plan. Forbearance periods or paused plans like SAVE may not count.

Consider Exploring:

• Submitting or updating your PSLF Employment Certification Form to confirm qualifying employment.
• Ensuring you're enrolled in a PSLF-eligible repayment plan (IBR, PAYE, or ICR, depending on your loan type).
• Tracking your progress and qualifying payment count through your servicer or StudentAid.gov.
  

If You’re in Default or Recently Delinquent

What to Know: Federal student loan collections resumed in May 2025. If you haven’t resolved your status, default may now appear on your credit report.¹³

Consider Exploring:

• The status of your loans via both your loan account and your credit report.
• Eligibility for Fresh Start, a program that offers a pathway out of default and back into repayment or IDR plans.
• Whether contacting your loan holder or servicer may clarify next steps or offer access to rehabilitative options.
  

III. Reframing Repayment: There’s More Than One Goal

Borrowers have different financial priorities—and student loan strategies should reflect that. Here are just a few reasons someone might choose one path over another:

• Minimize monthly payments to ease cash flow pressure
• Accelerate payoff to become debt-free faster
• Reduce total interest paid over the life of the loan
• Stay on track for forgiveness, especially under PSLF
• Protect credit during income fluctuations
• Regain eligibility for other financial goals (e.g., qualifying for a mortgage)
  

There’s no one-size-fits-all approach. The best strategy is the one that supports your values, obligations, and financial vision. That said, these goals often pull in different directions—reducing monthly payments may increase the total interest paid, while accelerating payoff might limit cash flow for other priorities. Student loan decisions are rarely binary; they often require balancing what matters most to you, now and over time.

IV. Budgeting Considerations, No Matter Your Strategy

Resuming payments may require rethinking your budget. Consider:

• Running the numbers: Compare your current plan with other options using the Loan Simulator.
• Factoring in all spending: Small cuts in discretionary areas (subscriptions, dining, etc.) can create room for consistent payments.
• Prioritizing automation or manual control, depending on your comfort level with cash flow and interest accrual.
• Tracking performance: Monitor how your repayment strategy affects credit, savings, or progress toward other financial milestones.