Student Loan Snapshot
Average balance
The national average student loan debt per borrower is approximately $35,210.Average monthly payment
According to Federal Reserve data, most borrowers pay between $200 and $299 per month, depending on factors like loan amount, interest rate, and repayment plan.Delinquency rate
According to a September 2024 article in The College Investor, around 7 percent of student loans are in default at any given time.About 92 percent of all student debt consists of federal student loans; the remaining 8 percent is private student loans. After the latest round of forgiveness, the Biden administration eliminated $167 billion in student loans for almost 5 million people, benefiting about 10 percent of student loan borrowers, according to the Department of Education (DOE).
Key Developments
Payment Pause and Interest Waiver
In March 2020, federal student loan payments were paused—the program was called “debt forbearance,” with interest accumulation halted to help borrowers during the economic fallout from the pandemic.Introduction of SAVE Plan
In 2023, the Biden administration introduced the Saving on a Valuable Education (SAVE) plan, aimed at lowering monthly payments and shortening the time to forgiveness for borrowers with relatively small loans.Court Rulings, Legal Challenges, and Practical Implications
The SAVE plan faced legal challenges and was blocked by federal courts in 2024, along with the loan forgiveness under the other Income-Driven Repayment (IDR) Plans—which had capped borrowers’ monthly payments as a proportion of their discretionary income. Millions of borrowers have been left uncertain about their repayment options.The IBR plan and Public Service Loan Forgiveness (PSLF) program—which allows government employees and some non-profits to have their student loans canceled after they make payments for 10 years—are untouched by the ruling.
However, processing for all IDR plans has halted, and applications for IDR plans have been removed from the DOE website.
From Pandemic-Era Debt Forbearance to a Punishing Drop in Credit Scores
Student loan borrowers have been feeling the pain recently as their credit scores are hammered. Some borrowers are seeing their scores suddenly drop as much as 200 points or more.After more than four years, pandemic-era protections are over. Late payment reporting has picked up momentum and the mystified loan holders aren’t sure where to turn.
After debt forbearance ended, the Biden administration launched a one-year “on-ramp” period, from September 2023 to September 2024. This was intended to help borrowers seamlessly return to repaying their loans, while at the same time avoiding any damage to their credit standing if they missed payments.
The end of the federal student loan on-ramp period seemed almost like a new bill or a new tax for many. Debt forbearance and deferred credit reporting were suddenly gone, and student loan payments would need to be paid in a timely manner.
Beginning in October 2024, any missed payments were treated as a 90-day delinquency. Beginning in February 2025, credit monitoring services returned to credit alerts, as borrowers watched their credit scores drop precipitously.
What Can You Do About It?
At some point soon, you will hopefully once again have the option of applying for an IDR plan to tie your payment schedule more reasonably to your income. Unfortunately, at least for now, as of March 2025, all IDR plans have been blocked for 3 months by the DOE.The DOE closed all online applications for IDR plans and loan consolidation, most likely in response to a lawsuit challenging the DOE’s authority to develop repayment plans that forgive student loans.
If your reported delinquency is erroneous, file a dispute with Equifax, TransUnion, and Experian.
Some loan service providers have dropped out, so it may just be that the company servicing your student loan does not have a current email address, mailing address, and phone number. This must be rectified to receive timely payment notifications.
Comparing Loan Servicers and Advisers
Of loan servicers, Nelnet may be the strongest choice. The U.S.-based conglomerate is primarily focused on financial services including student and consumer loan origination and servicing. Additionally, the company operates an investing arm, an internet bank, and owns Allo Fiber, a cable and internet provider.The student loan servicer currently serves millions of federal student loan customers, helping them find payment options that lead to successful repayment. Nelnet also offers application and claims processing for borrowers seeking loan discharge based on total and permanent disability.
Nelnet doesn’t charge origination, application, or prepayment fees, which can save borrowers money. And you may be eligible for discounts such as a 25 percent interest rate discount for enrolling in autopay. It offers retroactive account forbearance, though it won’t make a delinquency already reported to the credit bureaus disappear.
Nelnet also offers private loans for undergraduate, graduate, MBA, law, and advanced health profession degrees, as well as refinancing options.
However, it’s worth noting that Nelnet may not be the best fit for everyone. For example, borrowers with less-than-perfect credit might face challenges qualifying for a loan.
The Institute of Student Loan Advisors (TISLA)
A nonprofit organization offering free, unbiased advice on student loans. TISLA can help with repayment plans, loan forgiveness programs, and dispute resolution.SoFi
Known for its refinancing options and member benefits, SoFi also provides resources and tools to help borrowers manage their loans effectively.College Ave
Offers flexible repayment terms and tools to help students and parents navigate loan options.Earnest
Specializes in private student loans and refinancing, with a focus on customizable repayment plans.Federal Student Aid (FSA)
If you have federal loans, the FSA website provides comprehensive resources and tools for managing your loans, including income-driven repayment plans and forgiveness programs.Summary
Well-meaning attempts to help student loan borrowers impacted by the pandemic have, unfortunately, resulted in an already complicated student loan system becoming even messier, constantly changing, and more confusing.If you have student loans, it’s key that you update your contact information through the Federal Student Aid website and your student loan servicer website. This will make sure that you get crucial updates about your loan, about whether debt cancellation is available, news about reinstated IDR plans that you can apply for, or other possibly beneficial terms that may become available for servicing your student loan. Finally, shop around to compare student loan servicers and loan advisers.
