Federal Student Loan Repayment Resumes, 62% Borrowers Delinquent or Deferring

The resumption of federal student loan collection efforts in 2025 has highlighted a widespread financial crisis, with only 38% of borrowers current on payments and the remaining 62% facing delinquency or relying on forbearance and deferment. A proposed Repayment Assistance Plan (RAP), supported by House GOP legislation, aims to replace existing income-driven plans with a simplified, tiered payment structure based on adjusted gross income, capping payments at 10% for high earners and setting a minimum payment for low-income borrowers. This plan replaces the complex discretionary income calculations with straightforward income brackets, potentially easing repayment understanding and management. Meanwhile, student loan debt remains a significant burden nationwide, with an average debt of about $38,000 per borrower, exacerbating financial strain especially for recent graduates whose incomes often do not keep pace. Experts advise borrowers to adopt expense reduction strategies, such as cutting discretionary spending and optimizing fixed costs, alongside seeking income increases to better manage loan payments. These combined efforts reflect the multifaceted challenges and evolving policy responses aimed at addressing the student loan repayment crisis.