Finance

Student loans have been confusing lately. Here’s a guide to know where you stand

Between collections resuming, courts blocking student loan programs and layoffs at the Education Department, borrowers might be confused about the status of their student loans. Recently, the Education Department announced it would start involuntary collections on defaulted loans, meaning the roughly 5.3 million borrowers who are in default could have their wages garnished by the federal government. At the center of the turmoil are the government’s income-driven repayment plans, which reduce monthly payments for borrowers with lower incomes. Those plans were temporarily paused after a federal court blocked parts of the plans in February. “There’s so much confusion, they’ve made it very complicated,”

Biden-Harris Administration Approves $7.7 Billion in Additional Student Loan Debt Relief

This measure targets three categories of borrowers: those qualifying for Public Service Loan Forgiveness (PSLF), participants in President Biden’s Saving on a Valuable Education (SAVE) Plan who are eligible for its shortened forgiveness period, and those benefiting from adjustments to income-driven repayment (IDR) plans.