​Student Loan Changes for 2025: What to keep in mind for next year 

29/12/2024
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12:30
CSTWhile many people look forward to the New Year with hope and a renewed spirit, others, like student loan borrowers, see it with uncertainty. The Trump administration’s inauguration and the end of aid initiated during the pandemic will bring major changes to relief programs.The inauguration of President-elect Donald Trump next January will surely be the death knell for programs initiated by the Joe Biden administration, especially SAVE. Millions of borrowers signed up for the program, which was challenged in court and put on hold pending a decision.The Trump administration will surely let SAVE die, leaving all those who signed up for the program in limbo. Similarly, other income-driven repayment programs will change, forcing borrowers to seek alternatives that allow them to continue paying their debts.TDuring the COVID-19 health emergency, the federal government suspended wages, Social Security checks, and tax refund garnishment to help student loan debtors affected by the pandemic’s economic consequences.The pause was extended in 2023, and in 2024, garnishments restarted gradually. In 2025, the government will ramp up the garnishment program for all those whose debts remain in default. Similarly, the Department of Education will begin reporting defaulted debts to credit agencies.Last October, the Federal Reserve began to cut the interest rates it had raised to combat the inflation that soared during the pandemic. The gradual reduction that started this year will continue into 2025, dragging down interest rates on consumer debt, including student loans.This decline could cause some borrowers to refinance their federal debt with a private lender in search of better terms. However, experts warn that federal loans include protections for the borrower that private loans lack, so it is not always advisable to take this step.The Trump administration has not yet made public its position regarding student loans. Although the president-elect called his predecessor’s initiatives “vile” and “illegal,” he has not yet said how he will treat student loan debtors.For now, experts advise that if you are enrolled in SAVE or an IDR that is in danger, you should look for an alternative to be able to continue making your payments and not fall into a default that could have serious consequences for you and your family.