Student Loan Payments Are Back—Now What?

A federal court injunction issued on February 18, 2025, paused the U.S. Department of Education’s ability to fully implement the SAVE Plan and certain features of other Income-Driven Repayment (IDR) plans. While some services have resumed, many of the improvements announced in July 2023 remain on hold.

At the same time, student loan payments have officially restarted, leaving many borrowers feeling overwhelmed, especially those in default, who now face the added threat of wage or benefit garnishment. To help cut through the confusion and focus on what matters most, we’ve created a quick, plain-language guide outlining your repayment options moving forward.

Loan Status: What You Need to Know
Understanding where you stand is the first step in tackling student loan repayment. Whether you're in good standing, behind on payments, or in default, knowing your status helps you take the right next step.

How Do I Know My Status?
Start by logging in at studentaid.gov with your FSA ID. From your dashboard, you’ll see a summary of your loans, including:

• Whether they’re in repayment, deferment, forbearance, or default. 
• Your loan types (Direct, FFEL, Perkins, etc.). 
• The total balance and accrued interest

If you're unsure whether your loans are federal or private, this site will only show federal loans. Private loans won't appear here—you’ll need to check with your private lenders directly or you may be able to find this information on your credit report.

How Do I Know What My Payments Are?
Once you know your loan status, click into each loan for more detail. If your loans are active and in repayment, your servicer (learn about servicers below) should have provided the monthly payment amount, due date, and breakdown of interest vs. principal.

If you’re not sure or haven't received a bill, it’s essential to contact your servicer or log in to their website.

How Do I Know Who My Servicer Is?
Your loan servicer is the company that manages your federal student loan payments. You can find this information in your studentaid.gov account under the "My Aid" section. Common servicers include:

• MOHELA 
• Nelnet
• Aidvantage
• Edfinancial

Your servicer is your go-to for questions about billing, repayment plans, and options if you're struggling.

How Do I Know My Repayment Options?
Federal student loans come with several repayment plans. These include:

• Standard Repayment – Fixed payments over 10 years
• Graduated Repayment – Lower payments that increase over time
• Extended Repayment – Up to 25 years for larger balances

The following are Income-Driven Repayment (IDR) plans which are payments based on your income and family size. 

• Income-Based Repayment (IBR) - Either 10% or 15% of your discretionary income depending on when you took out your first loan.
• Pay As You Earn (PAYE) - 10% of discretionary income but never more than what you would pay under the 10-year Standard Repayment Plan
• Income Contingent Repayment (ICR) – 20% of your discretionary income, or the amount you would pay on a repayment plan with a fixed payment over 12 years, adjusted according to your income.

You can compare and apply for these at studentaid.gov/idr or talk to your servicer for help choosing the right plan.

What’s Currently Paused or Affected 
Due to the injunction, these aspects of IDR are on hold:

• New payment calculations under SAVE and REPAYE.
• Interest subsidies and forgiveness under SAVE, PAYE, and ICR.
• Certain forgiveness credit rules (e.g., deferment, forbearance and some payments counting towards debt forgiveness).
• Including or excluding spousal information (income) in payment calculations
• Payments prior to a consolidation loan being counted (averaged) towards the consolidation loan payments.
• Payments made before consolidating your loans did count (as an average) toward your new consolidation loan. For example, if you made 10 qualifying payments on a Federal Direct Loan before consolidating, those payments could be factored into your progress on the new consolidation loan. However, due to the court injunction, the process of adding this payment information is currently paused.
• Access to IBR for borrowers in default. It is not available until the student loan is brough current (see What to Do if in Default, below).

If You’re Enrolled in the SAVE Plan:
You are likely in general forbearance (no payments required, no interest accrues). However, no credit toward Public Student Loan Forgiveness (PSLF) or IDR forgiveness is earned during this forbearance. Additionally, SAVE plan loan forgiveness and benefits are paused.

It is important to note that forgiveness is still possible for those enrolled in the SAVE plan, through the IBR Plan. Payments made under paused plans (PAYE, SAVE, ICR) may count toward IBR forgiveness if you switch to IBR.

For PSLF Borrowers:
General forbearance time does not count as payments toward Public Service Loan Forgiveness (PSLF). Consider contacting your servicer or checking studentaid.gov for PSLF-specific guidance.

Interest Subsidy Changes on Student Loans:
The only Income-Driven Repayment (IDR) plan that currently continues to offer an interest subsidy is the Income-Based Repayment (IBR) plan. Under IBR, subsidized loans may qualify for an interest subsidy for up to three years, during which the government covers 100% of any unpaid interest on subsidized loans. There is no subsidy for unsubsidized loans under IBR.

Tax Implications of Forgiveness:
Currently, there is no federal tax on student loan forgiveness through Jan. 1, 2026 (per the American Rescue Plan Act). However, some states may tax forgiven amounts.

Borrowers will have the option to opt out of automatic forgiveness with 30-day notice. This becomes incredibly important if the amount forgiven causes serious tax ramifications. 

What to do if in default? 
Loan Rehabilitation
This is a one-time opportunity to remove a federal loan from default by making 9 affordable monthly payments over 10 months.
Benefits:

• Stops wage garnishment and tax refund offsets.
• Removes the default from your credit report.
• Keeps access to federal repayment plans and forgiveness.

Ask your loan holder about your rehabilitation terms—your payment may be as low as $5 depending on your income.

Loan Consolidation
You can consolidate defaulted loans into a new Direct Consolidation Loan, which brings them out of default—often faster than rehabilitation.

Requirements:

• You must agree to repay under an IDR plan.
• You’ll regain eligibility for federal benefits like deferment, forbearance, and forgiveness.

Note: Consolidation doesn’t remove the default from your credit report, but it does restore good standing.

Bankruptcy
While it’s very difficult, discharging student loans in bankruptcy is possible in rare cases. A court must determine that repayment would cause undue hardship. If you're exploring this option, it’s essential to speak with a bankruptcy attorney who understands student loan law.

That’s a Wrap – For Now
We understand—this is a significant amount of information to process. The recent court rulings and policy shifts under the new administration have created uncertainty, and it’s natural to feel overwhelmed. Staying informed by regularly checking the Federal Student Aid website and maintaining communication with your loan servicer is essential. If you have questions or need additional support, our student loan specialist is here to help. We’ll do our best to guide you through the changes and assist you in finding the right path forward.

Published May 14, 2025.