Options for affordable federal student loan repayment are shrinking

Consumer Action spells out what programs are available—for now

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As Congress and the White House work to dismantle borrowers’ student loan repayment options, Consumer Action spells out what programs are available—for now—to help borrowers avoid repayment debt traps.

In its topical newsletter, Consumer Action News, Consumer Action puts into plain English the array of complex repayment possibilities for federal and private student loan borrowers. Federal loan borrowers have programs (PAYE, REPAYE, IBR, etc.) based on income, loan type and loan date. The options for those with private student loan debt are far more limited than for those with federal loan obligations.

Still, Consumer Action reports, many government repayment choices are at risk of termination. Federal student loan forgiveness may be dwindling, as Congress and the U.S. Department of Education work on abolishing rules, such as the Borrower Defense to Repayment rule and the Gainful Employment rule, that provide debt relief to students defrauded by or left in the lurch by closed for-profit schools.

Attorneys general in California, New York, Massachusetts and Illinois have sued the Education Department for not discharging students’ federal loan debt and for illegally trying to collect on debts incurred at now-defunct schools like Corinthian Colleges.

“As political leaders rush to lighten the financial burden on corporations and the wealthy, borrowers bogged down with student loan debt—particularly from fraudulent for-profit schools—find government help under siege," said Linda Sherry, Consumer Action’s director of national priorities. "These students, who only were trying to better their lives, deserve affordable options to repay student loans. However, the current administration’s anti-borrower changes are fast and furious. As we speak, the debt relief programs we list in the new issue of Consumer Action News may be on the chopping block.”

For borrowers struggling with loan repayment, Consumer Action breaks down the federal income-based repayment plans and directs consumers to tools such as repayment calculators and a repayment estimator to help them understand the long-term financial impact of student loans.

Click here to view all articles from Consumer Action News.


Through multilingual consumer education materials, community outreach and issue-focused advocacy, Consumer Action empowers underrepresented consumers nationwide to assert their rights in the marketplace and financially prosper.




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