Student loan borrowers are facing more uncertainty amid an already trying time.
Many are left wondering what comes next after significant cuts to the Department of Education — how much they will pay, how they will pay and if relief and troubleshooting programs will still exist.
One of the many issues impacting borrowers is the limbo surrounding income-driven repayment plans.
Since late February, the application to recertify income has been taken offline, with expensive consequences for some borrowers.
"People are still getting recertification notices, but they can't actually recertify their income because the servicer won't process that application," said Kyra Taylor, a student loan expert and attorney at the National Consumer Law Center.
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The inability to recertify income can lead to dramatically increased monthly payments.
Late Wednesday the federal student aid servicer MOHELA announced it would not require borrowers to recertify their income until February 2026. Those changes could take weeks and it will depend on individual servicers.
For others, their loans have been in prolonged forbearances due to ongoing court challenges related to the Biden administration's SAVE plan, which had aimed to overhaul previous income-driven repayment plans.
The situation has particularly hindered those participating in Public Service Loan Forgiveness programs, which aim to release loans for public servants after they make 120 qualifying payments. "Right now, they're stuck. Honestly," Taylor said regarding their inability to seek other options.
Additionally, the end of COVID relief measures has had a cascading effect. Federally held loans were reported as current during the pandemic, providing a temporary shield for borrowers.
However, these protections ended in September 2024, and delinquencies are being reported to credit agencies as of January 2024. Some borrowers have reported significant credit score hits as a result.
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"What is most unfortunate is that even if you haven't heard anything about your student loans for years, those loans can still go into default and you can still be subject to collections," Taylor said.
With over 43 million borrowers, cuts to the Department of Education raise concerns about oversight of servicers and troubleshooting problems, which the department is tasked with.
"What will happen when there are problems with student loan servicers? What will happen when there are problems with the relief programs that borrowers have a statutory right to? Will they be able to get that relief?" said Taylor.
While many might assume that student loan debt predominantly affects graduate-level borrowers, federal student aid is widespread. It encompasses various educational paths, including trade schools and certificate programs.
As borrowers grapple with high payments and credit impacts, the results have far-reaching effects.
"I hear from borrowers who don't get married, don't have kids, forgo medical care. Can't get housing. Because of their student loan debt," Taylor said.
In many cases, those most affected are low-income individuals who find themselves unable to escape the cycle of debt, trapped by the very thing they hoped would lift them out of it.
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