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Student loan holders are facing unprecedented financial challenges in tackling their debt. For the first time in five years, federal student loan borrowers must pay their student loans or face financially crippling consequences. Nearly half of all borrowers, around 20 million, have not yet made a payment or have already fallen behind. Borrowers not in good standing by the end of the year will incur thousands of dollars annually in unnecessary penalties through negative credit, wage garnishment and collection fees.
Further increasing the stakes for borrowers, Congress passed and the president signed, the One Big Beautiful Bill Act, initiating sweeping changes to the federal student loan program that will increase student loan payments by an estimated $300 billion.
For borrowers, the law dramatically reduces access to current Income-Driven Repayment (IDR) options that help borrowers afford their monthly payments based on their income, replacing them with less generous plans that lengthen repayment timelines and increase monthly costs. Many borrower-friendly protections will be eliminated under the new law, including accelerated forgiveness, interest subsidies and flexible income calculations. The law also shrinks the safety nets that struggling borrowers once relied on to pause payments temporarily. Delinquency risks will grow, and borrower margins for
