Federal Student Loans Are Now Being Reported On Credit Reports — What You Need to Know
April 11, 2025
The party is over when it comes to student loan forbearance. After COVID-19 loan pauses ended in late 2023, the government issued a 12-month moratorium on reporting student loans to credit bureaus. That quietly ended on January 1, 2025. No formal notice was given to borrowers that forbearance for reporting to credit bureaus had ended. That means your credit score may drop significantly if you haven't been able to pay your student loan payments after the end of COVID-19 loan pauses.
The End Of COVID-Era Forbearance
Student loan payments are now due and enforceable. We have had clients who did not even realize that their loan pause had ended and have been shocked to find that they are being reported as past due to credit agencies. It’s essential to check your student loan account to see if your loan payments are past due. Failing to make your payments can severely impact your credit score, making it harder for you to take out a mortgage, rent a house or an apartment, qualify for certain jobs, and take out a car loan, among other consequences.
Adding to the confusion, because of multiple lawsuits and injunctions related to various student loan forgiveness or forbearance programs, such as the SAVE Program, many borrowers are unsure whether they need to start repaying loans or even the loan payment amount.
Some borrowers may be able to bring their loan payments up to date, but the missed payments will already be on their credit reports and could remain there for seven years. That means contacting your loan servicer and seeing where you stand is critically important.
What’s At Stake: Aggressive Collection Powers Of The Federal Government
If you are in financial trouble and default on your loan, the consequences can be severe. The federal government has powers that other creditors don't. If you default on your loan, the loan can be accelerated, meaning the entire balance, including principal and interest, can come due. Once your loan is accelerated, the federal government can withhold your pension, social security benefits, and tax refunds and apply the proceeds to repay the defaulted loan. Your loan servicer can sue you, and you could be charged court costs, attorney fees, and other related costs. It is time for urgent action if you are behind in your loan payments or at risk of default.
A New Legal Avenue: Discharging Student Loans In Bankruptcy
For the past 25 years, discharging a student loan through bankruptcy has been nearly impossible. That has changed drastically regarding federal student loans in the past few years. Now, the Department of Justice will work with debtors and consent to discharge in certain cases if a sworn attestation form shows that there is no money left over after reasonable and necessary expenses to pay the student loans, along with other factors such as how old the loans are, good faith attempts to pay the loans, and future inability to pay the loans.
We encourage you to explore this new path to relief before it’s too late. Under the current administration, changes to the federal government are happening daily. We hope this new path to discharge federal student loans doesn’t go away, but no one really knows whether this could change. Don’t wait until you are in default or your benefits are seized. Please contact us if you are at risk of default. We can review your case to assess whether bankruptcy or another legal remedy might be appropriate.
Bankruptcy stops all creditors, including student loans, from collecting the debt. The power of the automatic stay gives you breathing room to figure out the best path forward.
Call Us Today If You Are Considering Bankruptcy
Our team of experienced bankruptcy attorneys has assisted many people who have struggled with student loan debt. We have successfully assisted clients in discharging over $2,000,000 in federal student loans. Although we cannot promise the outcome of your individual case, using the new Department of Justice bankruptcy discharge guidelines is encouraging for many. BransonLaw is here to guide you through the bankruptcy process and help you protect your financial future. By taking proactive steps now, you can ensure you have access to the debt relief you need. Don’t wait until it’s too late—start the process today to secure a more stable financial situation tomorrow. Contact us today to protect your credit, your income, and your future.
We are located in Orlando, Florida, and handle bankruptcy cases throughout Florida. Call us today if you live, own property, or operate a business in Florida and cannot manage your debt. Our goal is to help you understand your options. Call BransonLaw so we can discuss your individual situation with your student loans. Our goal is to help you so you can sleep at night.