HERE IS YOUR GUIDE TO HELP ANSWER ANY QUESTIONS ABOUT THE CHANGES IN STUDENT LOANS YOU MAY HAVE Make sure you read the post before this one as well 1. What changed as of May 5, 2025? The federal government resumed involuntary collections on defaulted loans, ending a five-year pause. Borrowers in default may now face wage garnishment, tax refund seizures, and Social Security offsets. While payments and interest resumed in 2023, collections were paused until now. The SAVE repayment plan has ended due to legal challenges, and borrowers are being shifted back to older income-driven repayment (IDR) plans. 2. What if I was in the SAVE plan and it disappeared? Borrowers enrolled in SAVE are being moved to older IDR plans like PAYE, IBR, or ICR. Log into your account at StudentAid.gov to review your current repayment plan and make any needed changes. 3. Does this apply to Parent PLUS loans? Yes. Parent PLUS loans are federal loans and are subject to collection if in default. To access income-driven repayment, they must first be consolidated into a Direct Consolidation Loan, then enrolled in the Income-Contingent Repayment (ICR) plan. 4. Can they seize my tax refund if I'm in default? Yes. The Treasury Offset Program has resumed. If you’re in default, your federal and state tax refunds may be seized. 5. What is the first step if I'm in default? Call the Default Resolution Group at 1-800-621-3115. Ask about: * Loan Rehabilitation: Make 9 out of 10 consecutive on-time monthly payments to restore your loan to good standing and remove the default from your credit report. * Loan Consolidation: Roll your defaulted loans into a new Direct Consolidation Loan and restore eligibility for repayment plans and forgiveness. You can also begin the consolidation process at StudentAid.gov. 6. What if I’m not in default? Stay current on payments and remain enrolled in an IDR plan that fits your situation. Update your income and contact information regularly to avoid falling behind. Sign up for autopay to have your monthly payments automatically transferred from your bank account to the loan servicer. Not only will you be less likely to be late with a payment, but you’ll get a slight interest rate reduction (0.25% percentage points) as an incentive. If you encounter short-term financial difficulty, such as medical or maternity/paternity leave or job loss, consider a deferment or forbearance. Interest may continue to accrue during this temporary suspension of your repayment obligation. 7. My friends say I can just ignore the loans—is that true? No. Ignoring your loans can lead to wage garnishment, tax refund seizures, Social Security offsets, collection charges up to 25% and credit damage. Ignoring debt gives away your power—dealing with it gives you control. 8. Can I discharge my student loans in bankruptcy? Rarely. You must file an adversary proceeding and prove “undue hardship” in court. It’s possible but difficult. Speak with a bankruptcy attorney who has student loan experience. 9. Is there forgiveness for permanent disability? Yes. You may qualify for a Total and Permanent Disability (TPD) Discharge if the VA, SSA, or your doctor certifies you. Visit DisabilityDischarge.com or call 1-888-303-7818. 10. What if I qualify for Public Service Loan Forgiveness (PSLF)? You must: * Have Direct Loans * Be on a qualifying repayment plan (e.g., PAYE, IBR, ICR) * Work full-time for a qualifying nonprofit or government employer
Submit your PSLF Employment Certification Form annually using the PSLF Help Tool at https://studentaid.gov/pslf to track qualifying payments. PSLF is still active but closely scrutinized. 11. Do student loans go away at death? Federal Loans: Yes. If a borrower dies, the loan is discharged—including Parent PLUS loans if the student or parentdies. A death certificate must be submitted. No tax liability is assessed.
Private Loans: It depends. Some forgive debt at death, but many do not. If there’s a co-signer, they may still be responsible. Review the loan agreement carefully. 12. What kind of student loans does all this apply to? These rules apply to: * Federal Direct Loans (Subsidized, Unsubsidized, Direct PLUS, Consolidation) * Federal Family Education Loans (FFEL) – if held by the U.S. Department of Education * Parent PLUS Loans (with limits on repayment options) * Defaulted federal loans
 These rules do not apply to: * Private student loans * Institutional/state-based loans * Refinanced federal loans through private lenders 13. Do any of these rules help with private student loans? No. Private loans are not eligible for: * Income-driven repayment * PSLF * Federal forbearance or deferment * Federal discharges for disability or death What you can do: * Contact your lender and ask about hardship options * Refinance if you qualify for better terms * Consult a lawyer if collection is aggressive 14. I have a Parent PLUS loan—what are my options? To lower payments: * Consolidate the loan into a Direct Consolidation Loan * Enroll in ICR, the only IDR plan available to Parent PLUS borrowers
Note: ICR payments are often higher than those under other IDR plans. 15. What if my wages are already being garnished? Call the Default Resolution Group at 1-800-621-3115. Ask about: * Loan rehabilitation * Consolidation * Hardship hearing: You may qualify to challenge garnishment based on financial hardship or if you involuntarily lost your job less than 12 months ago. 16. What’s the difference between loan rehabilitation and consolidation? Rehabilitation: * Make 9 out of 10 consecutive on-time monthly payments * Removes the default status from your credit * Takes longer, but helps credit score Consolidation: * Combine loans into a new Direct Consolidation Loan * Get out of default faster, access new repayment plans * Does not remove the default mark from your credit history 17. Will I lose my Social Security benefits if I’m in default? Possibly. The government can garnish up to 15% of your monthly Social Security check, leaving you with at least $750/month, if you're in default. Act fast to avoid this. 18. Can I still apply for SAVE or another income-driven plan now? SAVE and REPAYE have ended due to court challenges. However, you can apply for: * PAYE * ICR * IBR 
 Check StudentAid.gov to view and switch your repayment plan. 19. How do I know if my loan is federal or private? Log into StudentAid.gov using your FSA ID. * If it’s listed, it’s a federal loan * If it’s not listed, it’s likely a private loan 20. What if I’m being contacted by debt collectors? Debt collectors for defaulted federal loans are contracted by the U.S. Department of Education. Beware of scams. To verify: * Ask for the name of the agency * Call the Default Resolution Group to confirm * Do not ignore notices—respond and document everything https://asksuze.disciplemedia.com/posts/3030?sh=wXVdezW3

Posted by Suze at 2025-05-07 12:57:39 UTC