Federal student loan system in disarray

NPR-  The federal student loan system is in disarray, leaving borrowers with pressing questions. Eight million federal student loan borrowers are waiting for the courts to decide whether their repayment plan is legal. Meanwhile, nine million borrowers are behind on their payments and at risk of defaulting. The U.S. Department of Education, which oversees student loans, has been cut in half. Loan management may be transferred to a different federal agency. NPR spoke with student loan experts and sought clarification from the Trump administration. Here's what borrowers need to know:

💵 On Oct. 1, 2024, the loan system’s master clock resumed ticking toward default for borrowers who fail to make required payments. When a borrower goes over 90 days without a payment, the loan becomes delinquent and is reported to national credit bureaus.  
💵 A borrower is considered in default after they go 270 days without making a payment. The U.S. government can then seize wages and tax refunds.
💵 The Trump administration issued an executive action that seeks to impose restrictions on Public Service Loan Forgiveness eligibility. They plan to exclude borrowers who work for organizations involved in activities with a significant illegal purpose, including violations of federal immigration law and “supporting terrorism.”
💵 The federal courts are debating the legality of former President Joe Biden’s Saving on a Valuable Education repayment plan.