The stream of changes to how the federal government manages student loans is leaving some of the 42 million Americans with student debt  – including 1.7 million borrowers in Ohio – feeling uneasy. 

“Uncertainty and confusion is the name of the game that I’ve seen over the last few months,” said Phil Wallace, director of Adult Programs at College Now Greater Cleveland. 

College Now offers free virtual and in-person counseling to Ohio adults looking for guidance managing their student loan debt. The nonprofit has advised 180 people since January. That’s a 23% increase from the same time in 2024.

The reasons borrowers are turning to College Now are changing, too. Last year, Wallace said, there was more interest in state and federal loan forgiveness programs, such as those for teachers and other public service workers. 

Now, he said, Ohio borrowers want guidance on what to do if they miss payments. They’re not alone. Nationwide, the federal government estimates only 38% of borrowers are up to date on their loan payments.  

There are consequences for those who aren’t. Loan servicers can begin reporting late payments to credit bureaus at the 90-day mark. That could hurt borrowers’ credit scores, which in turn may limit their abilities to get new credit cards or sign up for home utilities. 

But Wallace said the Ohio borrowers he’s talked with aren’t purposely ignoring their debts. 

“They’re not just saying, ‘I’m going to spend this money on vacations’ and things like that,” he said. “They don’t have the money to pay their student loans, so they’re not doing it.” 

Trump administration brings major changes to student loans 

Wallace thinks one reason there are more conversations about missed payments is that borrowers are still adjusting to paying back their federal loans. 

President Donald Trump paused loan payments during his first term during the COVID-19 pandemic. 

Borrowers were required to begin repaying their loans again in late 2023 under then-President Joe Biden. His administration ultimately forgave about $188 billion to more than 5 million borrowers during his four years in office. Some related efforts got blocked by courts. 

Trump’s first few months back in office have ushered in new changes, including massive cuts to the U.S. Department of Education. About 10% of the employees at the Office of Federal Student Aid took buyout offers. That includes staffers in the ombudsman’s office tasked with helping borrowers solve problems regarding their loans.

Some borrowers saw an increase in how much they pay each month after an application for one repayment plan was temporarily taken offline in March. It meant borrowers couldn’t complete a required income recertification to lock in their payment amounts. Processing times related to that plan remain backlogged. Other income-based repayment plans are in limbo due to legal actions, too.  

This week, Republican lawmakers in Congress introduced their own plan to overhaul higher education. 

The House Education and Workforce Committee’s proposal calls for fewer loan repayment plans. These new plans use different income-based formulas, meaning some borrowers could see higher monthly payments.  Plus, new borrowers would no longer be able to temporarily defer loan payments if they faced unemployment or other economic hardship. 

Government to begin collecting on defaulted loans 

Another big change is set to begin next month. 

The Department of Education plans to resume what’s called forced collections for the estimated 5 million people who haven’t made a payment for at least 270 days. This means the government can take portions of borrowers’ paychecks or tax refunds to pay back what they owe. 

“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,” Education Secretary Linda McMahon said in a news release.

This doesn’t apply to those enrolled in the Saving on a Valuable Education (SAVE) repayment plan. Borrowers in that plan aren’t currently required to make a monthly payment as it is being challenged in federal court. 

McMahon’s news release said the government will keep “borrowers updated with clear information about their payment options to put them on a productive path toward repaying their federal student loans,” including pointing them to a website.

Tell Signal Ohio how you’re feeling about student loans 

We want to hear from Ohio borrowers about how you’re managing your student debt and what you’re experiencing when trying to connect with the federal government. 

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