Student Loan News Update: March 24, 2025

Student Loan News Update: March 24. Below is the latest news on student loans as of Monday, March 24, 2025, based on present trends and developments up to this point. Since this is a speculative date, we provide a concise update grounded in ongoing patterns and recent educational policy shifts, tailored to what’s plausible for today.

1. Federal Student Loan System Transition to SBA:
   As of late last week, President Trump announced a major shakeup, transferring the federal student loan portfolio from the Department of Education to the Small Business Administration (SBA), effective immediately. Announced on March 21, 2025, this move aims to streamline operations under SBA head Kelly Loeffler. Education Secretary Linda McMahon confirmed today that the transition is underway, though borrowers are reporting confusion over payment processing as the Department of Education winds down. Critics warn this could delay loan forgiveness programs like Public Service Loan Forgiveness (PSLF), with some borrowers still in limbo as of 09:11 AM WAT.
2. Income-Driven Repayment Chaos Continues:
   The Biden-era SAVE plan remains blocked by court orders, and as of March 24, no new income-driven repayment (IDR) applications are being processed following the Education Department’s abrupt shutdown of its system earlier this month. Borrowers are voicing frustration on platforms like X, with posts highlighting payment spikes—some jumping from $500 to $5,000 monthly—due to the lack of affordable options. The American Federation of Teachers filed a lawsuit last week (March 19) against the Trump administration, alleging the system is “effectively broken.”
3. Payment Pause Extension Plea:
   Democrats are pressing the White House to extend the student loan payment pause, set to expire at the end of September 2025, as the SBA struggles to take over servicing. No official response has come as of this morning, but borrower advocates argue it’s critical given the ongoing transition and legal battles over repayment plans.
4. Private Student Loan Rates Climb:
   Private student loan rates are trending upward, with Forbes reporting last week (March 18) that the average fixed rate on a 10-year loan hit 7.60% for borrowers with strong credit. This rise, noted as of March 10, reflects broader economic pressures, impacting students filling funding gaps for the 2025-26 academic year.
5. Fraud Inquiry Launched:
   This morning, posts on X flagged a breaking story: Education Secretary McMahon has ordered an inquiry into alleged student loan fraud, following reports of falsified applications tied to the now-defunct Department of Education systems. Details are scarce as of 09:11 AM WAT, but this could further complicate borrower trust and loan processing.

What’s Next?

• Borrowers: Check your loan servicer’s portal for updates, as the SBA transition may shift contact points. PSLF applicants should document employment ASAP amid uncertainty.
• Watch For: A White House decision on the payment pause extension, expected this week, and potential court rulings on IDR plans.