{"id":36960,"date":"2025-10-17T14:27:33","date_gmt":"2025-10-17T14:27:33","guid":{"rendered":"https:\/\/financialrush.com\/?p=36960"},"modified":"2025-10-17T14:27:33","modified_gmt":"2025-10-17T14:27:33","slug":"what-student-loan-borrowers-can-and-cant-do","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=36960","title":{"rendered":"What student loan borrowers can and can’t do"},"content":{"rendered":"

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The Dome of the U.S. Capitol Building is visible in reflection on October 14, 2025 in Washington, DC. <\/p>\n

Andrew Harnik | Getty Images News | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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As the government shutdown stretches on, it\u2019s not easy for borrowers to gauge what\u2019s happening with their student loan<\/a> debt.<\/p>\n

The Education Department has been sending out forgiveness notices<\/a> to some borrowers, for example, but a lawsuit related to repayment plans and debt cancellation is on hold<\/a> during the stalemate in Washington.<\/p>\n

One thing that\u2019s not on pause: student loan payments. During the government shutdown<\/a>, borrowers<\/a> still need to pay their monthly bills, according to a U.S. Department of Education memo<\/a> from late September.<\/p>\n<\/div>\n

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Here\u2019s a look at more stories on how to manage, grow and protect your money for the years ahead.<\/em><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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With no end to the stalemate over a funding deal in sight, here\u2019s what else federal student loan holders need to know about what tasks they can and can\u2019t do related to their debt.<\/p>\n

\u201cDon\u2019t panic,\u201d said Betsy Mayotte, president of\u00a0The Institute of Student Loan Advisors<\/a>, a nonprofit that helps borrowers navigate the repayment of their debt. \u201cThe vast majority of actions related to federal student loans continue to be available.\u201d<\/p>\n<\/div>\n

Borrowers can still do \u2018pretty much everything\u2019<\/h2>\n
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On Oct. 1, the U.S.\u00a0government<\/a>\u00a0shut down<\/a>, meaning that federal workers across agencies were temporarily put on unpaid leave<\/a>, including at the Education Department.<\/p>\n

Fortunately, for federal student loan borrowers, most of their loan tasks are handled by companies with which the government contracts. These student loan servicers<\/a>, including Nelnet and CRI, continue to operate.<\/p>\n

\u201cWe\u2019re not really impacted at the moment,\u201d said Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers.<\/p>\n

For now, borrowers can still do \u201cpretty much everything,\u201d Buchanan said. They can apply for new repayment plans, request current billing statements and talk to customer service, he said.<\/p>\n

If you don\u2019t know which company is managing your student loans on behalf of the Education Department, you can find out at\u00a0Studentaid.gov<\/a>.<\/p>\n

Borrowers can also submit loan forgiveness applications under programs like Public Service Loan Forgiveness and the Total and Permanent Disability Discharge<\/a>.<\/p>\n

Getting their loan cancellation approved, however, is another story.<\/p>\n<\/div>\n

Where borrowers will feel shutdown effects<\/h2>\n
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While federal student loan borrowers can apply for debt cancellation programs during the government shutdown, they won\u2019t see the relief until agencies reopen, said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York.<\/p>\n

\u201cActual discharge will be delayed as that has to be approved by the Department of Education, which has furloughed or laid off most of its staff,\u201d Nierman said.<\/p>\n

Delayed forgiveness could lead to a tax bill for borrowers. The\u00a0American Rescue Plan\u00a0Act of 2021 made\u00a0student loan forgiveness<\/a>\u00a0tax-free at the federal level through\u00a0the end of 2025<\/a>. But President Donald Trump\u2019s \u201cbig beautiful bill\u201d did not extend or make permanent that broader provision, meaning the loan erasure may lead to a bill from the IRS come January.<\/p>\n<\/div>\n

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Some student loan borrowers were already experiencing delays to their loan forgiveness applications under the Trump administration. That prompted the American Federation of Teachers\u00a0to bring a legal challenge<\/a>\u00a0against Trump officials in March, in which it accused the Education Department of denying borrowers their rights to the debt forgiveness opportunities mandated in their loan terms.<\/p>\n

That lawsuit is on hold during the government shutdown.<\/p>\n<\/div>\n<\/div>\n\n
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