08/11/2025

Student Loan Update: What Now? (Part One)

Short-Term Steps to Take for Student Debt Relief

• The Department of Education and the passage of the One Big Beautiful Bill Act have made changes to the student loan repayment system that could affect you, if you are paying off student loans.
• The Department recommends that all borrowers immediately evaluate their current plan and consider moving to a different repayment plan.
• Use the Department’s Loan Simulator to estimate monthly payments under available repayment plans, determine repayment eligibility, and learn which option best meets your repayment goals. 

The AAC office has gotten inquiries from our members regarding the recent changes in student loan relief and what they should do moving forward. Student loan borrowers on various “income-driven repayment (IDR) plans” particularly have questions regarding where they stand, now and in the future. We have heard that some doctors and lawyers across the state have had issues with their loan servicer. In one particular case, a doctor was one month away from having his loan discharged after 25 years, but, due to a missed communication, his loan was not only not forgiven, but his payment has doubled. What’s going on?

In February, a federal court issued an injunction preventing the U.S. Department of Education (DOE) from implementing the Saving on a Valuable Education (SAVE) Plan and parts of other IDR plans, making the IDR and online loan consolidation applications temporarily unavailable.

While the applications are now back online, their unavailability affected borrowers in different ways, depending on their circumstances and their loan recertification date. [Recertification is the annual process of updating income and family size information for federal student loan borrowers that are enrolled in an income-driven repayment (IDR) plan.]

Recertification On or Before March 17, 2025:

• You were due to recertify on or before February 20, 2025.
• If you submitted your recertification request on time, and your servicer completed processing of your request, there should be no impact on you.
• If you submitted your recertification request on time, and your servicer did not complete processing of your request, your recertification date will be extended by one year. You do not need to submit a recertification request at this time.
• If you did not submit your recertification request on time, your servicer has temporarily recalculated your payment. This new payment is not based on income and family size. You are still enrolled in an IDR plan and must submit a recertification request as soon as possible to potentially lower your payment. Submit a new IDR application here.

Loan servicers are currently updating recertification dates, but the process is lengthy and ongoing. To log in and see your recertification date, click here.

Recertification On or After March 18, 2025:

• You were due to recertify on or after February 21, 2025.
• If you were due to submit a recertification request on or after February 21, 2025, but before February 1, 2026, your recertification date has been extended by one year. You do not need to submit a recertification request.*
• If your recertification date is on or after February 1, 2026, your recertification date has not been extended, and you are required to recertify by your existing recertification deadline.

* According to DOE, in some cases, borrowers who should have had their recertification date extended were moved to a monthly payment amount that is not based on their income and family size. Loan servicers are actively working to move those affected borrowers back to the monthly payment amount based on their income and family size.

Apply Faster with Federal Tax Information

According to DOE, if you’re filling out an application for an IDR plan, providing DOE with consent to obtain your federal tax information directly from the IRS eliminates the time-consuming work of manually uploading your income information. Electronically importing your financial information ensures the application has the most up-to-date data. Additionally, having your consent on file means your IDR plan will be automatically recertified each year, if eligible. Without it, borrowers are responsible for meeting the recertification date each year.

Additional Information

For more information, including a student loan borrower Q&A, click here.

Stay tuned for Part 2, where we will talk about how passage of the One Big Beautiful Bill Act has affected student loans, the phase-out of the SAVE Plan, options moving forward, and more.

Source: U.S. Department of Education’s Federal Student Aid website, IDR Plan Court Actions: Impact on Borrowers