What to Do If You Can’t Repay Your Federal Student Loans in 2025

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Struggling to Repay Your Federal Student Loans in 2025?

Young woman reviewing student loan payment alert on screen

If you're falling behind on your federal student loan payments this year, you're not alone. According to the New York Federal Reserve's Q1 2025 report, more than 5 million borrowers are now 90 days or more past due, and the delinquency rate has jumped to over 8%. This marks a sharp increase following the end of pandemic-era relief programs.

1. Understand Your Loan Status First

Visit your loan servicer or Studentaid.gov to confirm whether your loans are in good standing, deferment, forbearance, or default. Being proactive is key—ignoring missed payments can lead to credit score drops and even wage garnishment.

2. Enroll in an Income-Driven Repayment Plan (IDR)

IDR plans adjust your monthly payments based on income and family size. The recently expanded SAVE plan may offer lower monthly payments and interest forgiveness if you qualify. These plans can prevent default and help stabilize your budget.

3. Explore Temporary Relief Options

If you're dealing with job loss, illness, or other hardship, apply for deferment or forbearance. These programs allow you to pause payments temporarily, although interest may still accrue. Use this time to regroup financially.

4. Take Immediate Action: FedLoan Resumed Collections

As of May 2025, FedLoan and other federal servicers have resumed collection activities, including wage garnishment and tax refund seizures. If you're already in default or nearing it, contact your servicer now to discuss options like loan rehabilitation or consolidation.

5. Build a Financial Safety Net

Once you stabilize your loan situation, start building an emergency fund. Even small monthly contributions can reduce your future risk of delinquency and provide peace of mind during financial shocks.

Official federal student aid site showing SAVE and IDR plans

Final Thoughts

Missing student loan payments can feel overwhelming, but you’re not powerless. With new repayment plans, hardship options, and awareness of the latest federal actions, you can regain control of your finances in 2025.

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