Student Loans [View all]

A quiet storm is brewing. As will come as no surprise to DU or anyone else, the Dept of Education is currently in shambles. A literal ghost of its former self.

The announcement this morning of the intent to shift six major, Congressionally mandated, functions to other federal agencies, is just one more attempt to destroy the DoEd and it's mission.

That is only part of the story. While my insights and first hand knowledge are limited, the student loan program, at least for now, is still at DoEd but it's in chaos.
This administration has been in office for almost a year and student loans are still in lender mandated deferment, i.e. no one is currently required to make payments but can if they would like.

There is where the rub is at. Most people, especially now, in the current economy, are not going to make a payment, even if they could, because they have other bills that have to pay right now. Interest is still accruing though .
So for well over a year for many people, student loans have been in lender initiated deferment.

Yes, people could, in theory, make interest payments but most don't realize that and again, especially given the state of the economy, people just cannot or will not, make payments.

That means that student loans repayment has been stalled and gaining interest for well over a year and no end in sight. I was told by one person that their loan isn't showing to restart until May of 2028.
Not to mention the chaos of what payment plans are still active or not and what choices are available and if kicking people off the SAVE plan is even legal.

It's a class action lawsuit waiting to happen. This insanity has significant real world consequences, from their credit score to if they need to fill bankruptcy or not, they have no clear directions and one does not seem forthcoming anytime soon.

Reference: https://www.politico.com/news/2025/11/18/trump-administration-sets-out-massive-education-department-restructuring-plan-00656464?0&nid=0000015a-dd3e-d536-a37b-dd7fd8af0000&nname=playbook-pm&nrid=34e36af0-b62d-40bd-9790-d663eef6c736