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Millions of borrowers like you are trying to stay ahead of federal student loan changes. And that’s where SoFi comes in. We’ll update you with the latest on loans, so you can make the best call for your future.
In today’s landscape, student loan borrowers are navigating payoff journeys that are shaped by ever-changing factors like cost and cultural expectations. To better understand how they’re approaching these decisions, and thinking of their debt in 2025, SoFi surveyed 3,500 prospective and current students, graduates, and parents. After analyzing the findings and holding in-depth conversations with leading industry voices, we uncovered a revealing look at the emotional, financial, and practical realities shaping how families think of college as an investment today—and the kinds of support they’re actively seeking in their personal finance journeys. Check out our findings here.
Student loan news you need now.
April 21, 2025 – The Department of Education to start collection efforts on defaulted student loans for the first time in five years.
The Department of Education’s Office of Federal Student Aid (FSA) will resume collections on defaulted student loans on May 5, according to a department press release. This means that for the first time since March 2020, borrowers who are in default (typically those who are at least nine months behind on their payments) could have their wages garnished or face other legal and financial consequences.
If you’re in default on your loan(s), contact the Default Resolution Group to make a monthly payment, enroll in an income-driven repayment plan, or sign up for loan rehabilitation.
April 7, 2025 – Federal deferment and forbearance applications continue.
Borrowers facing hardship or having trouble paying student loans can still apply for deferment or forbearance with forms at StudentAid.gov. Keep in mind that interest still adds up with these programs.
March 28, 2025 – Missed student loan payments may now affect your credit.
It’s the first year since the pandemic that skipping student loan payments could hurt your credit score. Being 90 days past due could mean a big hit—a delinquency on your credit report could drop your score over 150 points. Learn more. Or track your credit with SoFi.1
March 26, 2025 – Three income-driven repayment plan applications have returned.
Online applications are back for Income-Based Repayment, Pay As You Earn, and Income-Contingent Repayment Plans. The online loan consolidation application is also back. However, the Saving on a Valuable Education Plan remains blocked by a federal court. Visit StudentAid.gov for the latest.
March 21, 2025 – Your student loan payments must continue despite the executive order to shut down the Department of Education.
Step one: Let’s go over some common terms to avoid confusion.
Expand each section for more.
APR versus interest rate
APR versus interest rate
• What’s the difference?
APR, which stands for annual percentage rate, is the interest rate plus any fees your lender may add to the principal loan amount. The interest rate alone is what you’re being charged to borrow money from your lender, expressed as a percentage of the principal loan amount.
• Which fees are typically included in an APR?
The most common fee included in an APR is the student loan origination fee. This fee is typically based on a percentage of the total loan amount and gets deducted from the funds you receive before the loan is disbursed. Some lenders—like SoFi—don’t charge any fees.
• How do interest rates work?
The interest rate represents the amount your lender is charging you to borrow money. It’s expressed as a percentage of your loan amount (or principal) and doesn’t reflect any fees or other charges that might be connected to your loan.
Fixed versus variable rate
Fixed versus variable rate
• What’s the difference?
True to its name, a fixed interest rate does not change—it remains the same throughout the life of a loan, whereas a variable rate fluctuates with changes in the market.
• When might a fixed rate make sense?
If you like the security of knowing exactly what your monthly payment will be over the life of your loan, a fixed-rate loan is a good option. This consistency makes budgeting easier and offers peace of mind in times of economic uncertainty.
• When might a variable rate make sense?
A variable-rate loan can benefit borrowers in a declining interest-rate market because their monthly payment will decrease as well. However, when interest rates rise, borrowers who hold a variable-rate loan will find that their monthly payment also increases.
Federal versus private loan
Federal versus private loan
• What’s the difference? Federal student loans are funded by the government—they can be subsidized or unsubsidized. Private student loans are not associated with the government, so their repayment terms vary from lender to lender. Unlike federal loans, interest rates can be either fixed or variable.
• How do I know whether my loan is federal or private?
To figure out whether your student loan is federal or private, visit the National Student Loan Data System (NSLDS). The database is a collection of information on student loans that aggregates data from universities, federal loan programs, and more.
• What are the benefits of a federal student loan? Federal student loans include benefits not typically offered by private lenders, including income-based repayment, public service loan forgiveness, and deferment options.
Step two: Let’s get a clearer idea of how the federal government could impact your loans.
Expand each section for more.
Department of Education
Department of Education
• Historical role
While the responsibility for education in the U.S. largely falls to states and local municipalities, the Department of Education has historically provided funds to help schools and districts reach their goals. Further, the Department of Education has managed the federal student loan program.
• Potential closure
A March 2025 executive order required the Department of Education to close “to the maximum extent appropriate and permitted by law.” Fully closing it would require Congress to act. But the order could lower the workforce and significantly reduce services. The Small Business Administration has been ordered to take over the federal student loan portfolio, but details and timing are not yet clear.
Forgiveness programs
Forgiveness programs
• What is available?
The last few years have seen a lot of change to student loan forgiveness. While some forgiveness was blocked by court action, other forgiveness programs could still remove some or all of borrowers’ remaining student debt.
• Income-driven repayment
An income-driven repayment (IDR) plan could give eligible borrowers a more affordable monthly payment based on income and family size. After enough qualifying payments on an IDR plan, your remaining balance could be forgiven. Options have changed, and may do so again. Visit StudentAid.gov for updates.
• Sample plans Online applications are available for Income-Contingent Repayment (ICR), Income-Based Repayment (IBR), and Pay As You Earn (PAYE). The Saving on a Valuable Education (SAVE) Plan remains blocked by court action. Public Service Loan Forgiveness (PSLF) could forgive the remaining balance on a federal Direct loan for borrowers in public service careers after enough qualifying payments.
Executive orders
Executive orders
• What do they cover?
Published in the Federal Register, executive orders are directives from the President of the United States to manage operations of the executive branch of the federal government. Although executive orders have historically related to administrative matters and internal operations of federal agencies, recent presidents have used executive orders more broadly to carry out policies and programs. They may be revoked by the President at any time. See 2025 executive orders.
• How do recent orders affect student debt?
Issued March 7, 2025, the executive order Restoring Public Service Loan Forgiveness directs the Public Service Loan Forgiveness (PSLF) program to now exclude organizations that engage in activities that have a “substantial illegal purpose” such as illegal immigration, terrorism, child abuse, discrimination, and public disruptions. It aims to ensure “only legitimate public servants benefit.”
More info to help you stay caught up.
The state of student loans is shifting quickly and often. Learn more about the latest changes and what options are available to you.
Here are some strategies to consider as you explore ways to repay your student loans.
Pay down the principal.
One of the most effective ways to get ahead of student debt is to pay more than the monthly minimum. Even an extra $50 each month could make a big difference. Paying down your principal balance could reduce the total interest you’d pay over the life of the loan and shorten your repayment period.
Applications have reopened for federal income-based repayment plans like Income-Based-Repayment (IBR). You may even be eligible to have your federal loans forgiven after 10 years if you work in public service full-time under the Public Service Loan Forgiveness Program (PSLF).
Refinancing your student loans through a private lender could help you get a lower interest rate or reduce your monthly payments. You could also consolidate multiple student loans into a single payment for easier management. Keep in mind that refinancing federal loans means benefits like income-based repayment plans and deferment options would no longer be available to you.
We get it. You want to think about your loans as little as possible. Here’s a quick, hot take on student loan repayment. Give us two minutes to break it down.
What Is Student Loan Refinancing?
How To Budget for Student Loan Payments
Run the numbers on your student loans.
Calculate your monthly payment with a new interest rate, see your payoff date, and determine whether refinancing could save you money.
Monthly payment calculator
Punch in your loan amount and a new interest rate, and we’ll estimate your monthly payment.
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
Free tools to set you up for life beyond debt.
Student Loan Tracking
Our free credit score monitoring tool allows you to track your student debt for a quick overview of your monthly payments, loan status, and payoff date—at no extra cost.
Our free credit score monitoring tool allows you to track your student debt for a quick overview of your monthly payments, loan status, and payoff date—at no extra cost.
Whether your goal is to pay off your student loans as quickly as possible, increase your savings, or invest for the future, our budgeting tools may help—and they’re free.
Whether your goal is to pay off your student loans as quickly as possible, increase your savings, or invest for the future, our budgeting tools may help—and they’re free.
Need help applying for SoFi Student Loan Refinancing? Our live support team could help you understand the complexities of student loans and suggest refinancing options based on your individual needs.
