Federal Student Aid

Student-loan borrowers are navigating confusion stemming from repayment changes that took effect on July 1, resulting from an overhaul. Borrowers have reported encountering inaccurate bills and payment glitches, while the transition away from the SAVE plan has complicated budgeting efforts due to confusing notification processes. Furthermore, the Department of Education confirmed instances where borrowers received incorrect payments or were wrongly notified of past-due statuses.

Student-loan borrowers mistakenly received past-due notices from servicer MOHELA, which the Education Department confirmed was an error. Affected borrowers will receive correction emails, and the issue occurs amid President Donald Trump's student-loan repayment overhaul. Administrative errors, including incorrect payment notices for 6,000 borrowers, have raised concerns about billing accuracy and servicer support.

6,000 student-loan borrowers were notified to reapply for income-driven repayment plans after a glitch caused incorrect payment amounts. The error affected those who manually updated their family size, as the system could not recalculate payments using on-file tax information.

Student-loan borrowers report difficulties obtaining clear information from loan servicers, including long hold times, disconnected calls, and conflicting payment details. The Education Department claims it monitors servicer performance, but borrowers like Jessica Salmi, Jason Marques, and Robin Binkley describe struggles to navigate repayment plans and payment amounts.

Clinton College faces scrutiny over financial struggles and late payroll, prompting external monitoring by its accrediting agency TRACS and federal oversight bodies. A former employee reported receiving late payments multiple times before resigning, highlighting concerns about the institution's financial practices.

Federal Student Aid (FSA), the office managing U.S. student loans, has been significantly impacted by DOGE cuts, leading to operational issues and challenges for borrowers. Upcoming changes in July 2025 will impose lifetime loan caps and limit repayment options, while a report reveals 40% staff attrition at FSA, with nearly a quarter of suboffices having no remaining employees.

Republicans who supported loan limits and reduced federal student aid are relying on private lenders to cover the gap. Critics argue private lenders will prioritize students with strong credit histories, potentially limiting access for low-income individuals.

Student-loan borrowers were incorrectly informed their monthly payments would be $50, but some now face significantly higher bills. The Education Department confirmed the error, which affected borrowers who shared tax information with Federal Student Aid, and stated the issue has been resolved with corrected payments expected soon.

The article outlines the process of obtaining federal and private student loans, emphasizing the importance of the FAFSA form to determine financial aid eligibility. It highlights key loan types, including Direct subsidized and unsubsidized loans, and explains how interest accrual differs between them.

College graduates outearn those without a degree within 15 years, despite tuition costs. A study found that certain college majors offer a better long-term return on investment. College grads can expect to earn more than non-grads over their lifetime.