How To Navigate Student Loans In 2025

The scope of student loan repayments has unexpectedly undergone significant changes in a short time, leaving borrowers seeking clarity for student loan repayments, loan forgiveness programs, and how they need to plan financially to cover these payments.

Here’s what you need to know about navigating student loans amid the myriad changes.

After a five year hiatus prompted by the COVID-19 pandemic, the U.S. Department of Education announced at the end of April that they will resume collections on defaulted federal student loans starting May 5. According to a 2023 TransUnion analysis report, 40.6 million consumers have student loans, totaling $1.6 trillion in balances.

Earlier this year, President Trump signed an executive order to demolish the U.S. Department of Education, which led many borrowers to be confused on if students loan repayments would have to be repaid or not. 

President Trump made in a statement that, “[he] decided that the SBA, the Small Business Administration, headed by Kelly Loeffler, will handle all of the student loan portfolio(s).”

According to the U.S. Government Accountability Office, borrowers who are defaulted on their federal student loans are described as people who are 90 days or more overdue on payments. Borrowers who fail to make timely payments may face serious financial ramifications, including major credit score drops, wage garnishment, withholding of tax refunds and contraction of government benefits.

These are a few steps borrowers should take in order to be praepared and take action:

Check your loan balances, current status, repayment plans. Keep in mind, major student loan servicing companies like Nelnet has restructured the managing of student loan portfolios, by dividing portfolios by alphabet and giving the remaining to another servicing company called Sloan Servicing.

Check to see if you’re eligible for a repayment plan such as income driven repayment plans. Also explore options from your employers, as some employers are assisting with making tax-free student loan payments for employees.

Monitor official communications from the Small Business Association and your loan servicing company for updates on policies, repayment plans, and forgiveness programs.

If you’re unsure about your options, or still need further explanation then consult with a financial advisor or a counseling agency specializing in student loans.

Navigating student loan repayments in 2025 requires diligence and proactive management. By staying informed and exploring available resources, borrowers can make informed decisions to manage their student debt effectively.