Loan expert breaks down Department of Education’s changes on repayment rules for student borrowers​on March 12, 2025 at 5:17 am

HOUSTON, Texas (KTRK) — The Trump administration is working to shrink the Department of Education, and the impact goes beyond public schools. Student loan borrowers are dealing with a different set of rules for repayment now.

Federal courts have paused popular Biden-era programs. Those programs cut down the number of years it takes to reach forgiveness and capped monthly loan bills at 5% of a borrower’s income.

Now, the Department of Education has removed applications for these plans from its website, effectively locking borrowers out from adjusting their plans if they can’t pay the standard rate.

A loan expert joined ABC13 Eyewitness News Tuesday morning and said anyone who is 91 days delinquent on April 1 will be reported to credit bureaus for the first time in five years.

You can watch that full interview in the video player above.

READ MORE: What is the Department of Education? Here’s a look at some of its key functions

What dismantling the Department of Education could mean for schools

“If you’re going to buy a car or get an apartment or a mortgage or another credit card, you will see your credit score drop precipitously,” Jack Wallace told ABC13. “It’s important not to ignore the notices you’re getting.”

If the department is eventually dismantled, student loans could land at the treasury, commerce, or the Small Business Administration.

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