7 Essential Steps Student Loan Borrowers Should Take Before 2025

As student loan borrowers face potential changes under the incoming administration, now is the time to prepare. With forgiveness programs and repayment options in flux, these seven steps can help ensure you’re ready for what’s ahead.

1. Evaluate Your Loan Forgiveness Options

Not all forgiveness programs are at risk of disappearing. Statutory initiatives like Public Service Loan Forgiveness (PSLF) and Total and Permanent Disability Discharge are harder to repeal, but changes could still occur. Stay informed about your eligibility and ensure you understand your options now.

Tip: Check your forgiveness progress on StudentAid.gov and dispute inaccuracies promptly.

2. Solidify Your PSLF Status

PSLF remains a top choice for borrowers in government or nonprofit careers, but it requires proactive maintenance.

• Review and update your PSLF payment counts through the PSLF Help Tool.
• Submit new employment certifications if it’s been a while.
• Explore PSLF Buyback if you’re nearing the 120-payment milestone.

3. Prepare for the SAVE Plan’s Potential End

The SAVE plan, which offers lower payments and eventual forgiveness, faces legal challenges. It could be struck down or repealed under the next administration. Borrowers on SAVE should evaluate alternative income-driven repayment (IDR) plans, like IBR or PAYE, and budget for potential increases in monthly payments.

4. Assess Repayment Options if You're a New Borrower

Recent graduates or borrowers exiting grace periods should prepare for repayment without the SAVE plan. Use the Department of Education’s Loan Simulator tool to compare repayment plans and understand which options align with your goals.

5. Budget for Higher Payments in 2025

Expect higher payments if:

• Your earnings have grown since you last applied for an Income-Driven Repayment (IDR) plan.
• You’ve recently married and are filing taxes jointly (spousal income affects calculations).
• The SAVE plan is repealed, requiring a shift to more expensive plans.

Consider consulting a tax advisor if filing taxes separately might lower your payment.

6. Get Out of Loan Default

Defaulted borrowers will face renewed collection efforts in 2025. Take action now:

• Explore consolidation, rehabilitation, or forgiveness options to exit default.
• Understand that staying in default may disqualify you from certain forgiveness programs like PSLF.

7. Safeguard Yourself Against Servicing Issues

Loan servicing errors and mismanagement are rampant. Protect yourself by:

• Downloading and saving loan-related records.
• Regularly logging into your account to monitor for errors.
• Staying informed about program updates through reliable sources rather than relying solely on servicers.

Pro Tip: Your state attorney general’s office or student loan ombudsman can assist with disputes if federal options falter.

Bottomline

As 2025 approaches, student loan borrowers must be proactive in navigating a changing landscape. Whether you’re working toward forgiveness or exploring repayment plans, staying ahead of policy changes is key. Take action now to secure your financial future. Let’s connect to discuss how this impacts your real estate journey or broader financial goals.