The Biden administration’s plans to help millions of Americans with student loans have hit another snag. The U.S. Department of Education has directed student loan servicers to temporarily halt income-driven repayment and loan consolidation applications for three months.
This pause means borrowers will no longer be able to enroll in IDR plans, which adjust monthly payments based on income and family size. Without access to these options, many may face higher payments and fewer pathways to long-term relief. Borrowers like Garcia are already struggling to navigate the new repayment landscape.
The halt also comes as millions of Americans grapple with bad credit scores. A lower credit score can lead to higher interest rates on loans, car payments, and insurance premiums. Experts advise that restoring a good credit score is crucial for saving money over time. The National Foundation for Credit Counseling recommends prioritizing timely payments and keeping past-due accounts up to date.
Meanwhile, millions of Americans are struggling with record-high interest rates on credit cards. Consolidating debt with a personal loan can help save money, simplify payments, and accelerate debt payoff. A free online service like Credible can show borrowers the best lending options to pay off their credit card debt fast.
Source: https://moneywise.com/loans/student-loans/39-year-old-nurse-was-blindsided-when-her-credit-score-dropped-from-720-to-620-over-a-student-loan-she-thought-was-suspended