Major changes are underway for federal student loans in, leaving millions of borrowers uncertain about what’s next. The Department of Education has reopened applications for income-driven repayment (IDR) plans after a court order blocked the Biden-era SAVE Plan and temporarily suspended access to these options. Borrowers can now apply for IDR plans like Income-Based Repayment and Pay As You Earn, but processing delays are expected as the system recovers from the shutdown.
Meanwhile, President Trump has signed an executive order to begin phasing out the Department of Education’s role in managing student loans, proposing to shift oversight to the Small Business Administration or the Treasury Department. This move could impact how loans are serviced, what repayment options are available, and how forgiveness programs like Public Service Loan Forgiveness (PSLF) are administered. No new forgiveness programs have been approved, and some existing options may be reduced or redefined as rulemaking continues.
For now, the terms of existing federal loans remain unchanged, but borrowers should expect possible changes in customer service, paperwork, and eligibility for certain programs as the transition unfolds. Experts recommend staying in close contact with loan servicers and monitoring updates from the Department of Education as the situation develops.
