Student Loan Update with Tina & Kylie
A lot has changed with federal student loans over the past year, and in this episode of Financially Naked: Stories from The Financial Gym, Tina and Kylie discuss the latest updates. They cover the status of the SAVE Plan, what borrowers should do if they’re close to forgiveness on other plans, and how to prepare for potential changes in the future. With so much uncertainty in the student loan space, staying informed and vigilant is the best way to be prepared.
Podcast Notes
The Current State of Student Loans
After being implemented, the SAVE Plan has been tied up in court, leaving many borrowers in limbo.
While litigation is happening, borrowers have been placed on administrative forbearance. This means they do not have to make payments, but these months are not counting towards loan forgiveness.
As of this recording, forbearance is expected to end by fall 2025, with payments resuming in December. Other plans (PAYE & ICR), which were being phased out, have been reinstated.
The on-ramp ended in September, which means that late payments may be reported to the credit bureaus. Make sure to check on the status of your loans and open any emails or letters from your loan providers.
What Borrowers Should Know
The future of student loans is uncertain right now. The best thing borrowers can do is stay informed and be proactive.
The SAVE Plan may not last, so use the SutdentAid.gov estimator to see your payments under other plans. Be prepared for potential payment increases.
If you have not had to recertify your income in a few years for your IDR plan, you will be asked to do so again soon. If your income has changed, your payments may also shift.
Borrowers can opt to have their tax return data automatically shared so they do not have to manually recertify their income every year.
The Department of Education is not currently processing IDR forgiveness on payment plans other than IBR. This has caused more uncertainty for borrowers, especially those close to forgiveness.
How to Stay Prepared
There are reports suggesting the Department of Education may be dismantled, which could disrupt the federal student loan program. It’s unclear who will be in charge of the loans if this happens; nothing is certain right now.
Keep personal copies of your student loan data for your own protection. Download and save your loan records from studentAid.gov—take screenshots of your IDR or PSLF progress and payment history to protect yourself.
The screenshots of your dashboard at studentaid.gov summarize your current student loans and their status. It also has an IDR tracker for people enrolled in income-driven repayment plans, which tells you how much time is left before you qualify for student loan forgiveness.
For PSLF information, click the “Track Your PSLF Progress” link in the “Quick Links” box on the studentaid.gov dashboard.
On the website, download all of your loan data (under the "my aid" page), then go to "my activity" and download documents related to loan consolidation, payment plan applications, FAFSA forms, and PSLF documents! To find this info:
“View Details” button in the “My Aid” box
Click the “Download My Aid Data” in the top right corner.
Save the file in your records. This raw data file includes status/repayment history, IDR anniversary date, current loan status, school enrollment history, loan servicer details, interest rates, and other important information.
If the loans are transferred to another department, these records can help during that transition. We can’t control what happens but can do our best to stay vigilant and prepared.
If you want to work with a Certified Financial Trainer to help navigate your finances, schedule a free warm-up call today! If you have any ideas or questions for the show, send an email to trainerpodcast@fingyms.com.
Resources
Meet The Trainer
Tina Hang, Certified Financial Trainer
Kylie Lipinski, Certified Financial Trainer