Articles Posted in Student loans

It has now been several years since borrowers have had to deal with their student loans – but The Times They are A-Changin’ as Bob Dylan sang in 1964.

This will be a multi-part series on what we are seeing out there now, and what we have found is working to meaningfully decrease student loan debt.  It has gotten much harder over the past year, but it’s still possible in many situations.  As always, you can schedule a Student Loan Strategy Session with us to go over your loan particulars, what options you have and whether you are on the best path forward.  We charge for those sessions, and we’ve been told by a lot of borrowers that it was money very well spent.  We didn’t break the student loan system, (it’s been broken for a decade at least) but we hopefully will have some insight and advice on how to save the most money and see some light at the end of the tunnel.

We will first address some opportunities in bankruptcy that may be overlooked by most.  Then we’ll cover what we are seeing regarding the IDR Recount, forgiveness emails going out now, how to obtain the lowest possible payment for those with Parent Plus loans, and collection news such as whether Social Security is being offset.

One major piece of litigation supported by a non-profit group has just been filed – so it will be awhile before we have any answers.

This legal complaint, filed on September 9, 2025, by the American Federation of Teachers (AFT) and several individual plaintiffs against the U.S. Department of Education and its Secretary, Linda McMahon, alleges that the Department is unlawfully withholding access to and benefits from federal student loan income-driven repayment (IDR) plans and the Public Service Loan Forgiveness (PSLF) program.

Here’s a summary of the key points:

We are hearing numerous reports of  surprise billing by student loan servicers especially now that SAVE is no longer an option.  Or the checking account is being hit with a standard repayment amount rather than an IBR payment based upon someone’s income.  If f you have permitted auto billing in the past, you may be surprised by a charge out of the blue for an unexpected amount.

A tip to help avoid this situation is to set up a separate checking account to obtain the .25% auto pay deduction.  This will avoid a surprise payment and a cascade of NSF fees that could result.

Folks are reporting that they are being asked to make a large student loan payment – but they in in a long queue waiting for their Income Driven Plan (IDR) application to be processed.   This is happening because if a payment isn’t being made, the loan defaults to the Standard payment plan (which is usually very high).

You need to request administrative forbearance while the IDR application is pending.  It’s supposed to happen automatically, but often doesn’t.  Don’t wait until your credit score is hit to do this please!

Those with federal student loans have had a five year reprieve for collections on federal student debt.  We are seeing more delinquencies as people do not not realize they were due to make a payment and for those borrowers who cannot afford to make a payment now.

There may be relief (talk to us about your specific circumstances) but settlement is likely not an option for most.  The Department of Education has very strict limits on settlement of federal student loans:

1. 100% of current principal and interest (better credit reporting)

The IDR payment tracker was removed from many if not all borrower’s studentaid.gov sites today.

You can still find your payment count however.  Write your servicer directly for it or use this direct  link after you’ve logged onto StudentAid.gov:  https://studentaid.gov/app/api/nslds/payment-counter/summary​.

This link shows in a computer code format called JSON which you can’t read.  But if you copy it into an AI tool such as ChatGPT, Claude or any of the others, it can be translated into regular English.

We’re hearing a lot of people are finding out their student loans are delinquent – another today that received a 90 day late and had no idea they were out of deferment.

The dings to your credit are not small — we had a client recently who had four student loan accounts (not unusual at all) and the hit to his credit was 200 points.

You can imagine what a 200 point hit will do especially when it’s unexpected!