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Negotiated Rulemaking and Student Loans

In November, the Reimaging and Improving Student Education (RISE) negotiated rulemaking Committee reached consensus on the proposed regulations to the student loan system from the One Big Beautiful Bill (OBBB) that was passed in July 2025. The next step in finalizing the proposed changes is to issue a Notice of Proposed Rulemaking (NPRM).

• The Department of Education (ED) has recently issued the NPRM and it will be open for public comment for 30 days. You can view the NPRM here.
• Comments on the proposed rules can be submitted through the Federal eRulemaking Portal. Comments must be submitted prior to March 2, 2026.
• Once the comments are reviewed, ED will finalize the rule with majority of changes taking affect July 1, 2026.
• The new regulations include but are not limited to:
• Changes to loan repayment plan options
• Elimination of the Grad PLUS loan program
• Changes to loan limits for Parent PLUS and Graduate/Professional loans
• Changes to how loans are disbursed

Federal Student Aid and Government Lapse in Appropriations

There was short lapse in appropriations affecting the Department of Education (ED) and several other federal agencies late last week. The House passed a spending package to fund ED and many other federal agencies through the end of the 2026 fiscal year, which is September 30. The President signed the budget bill into law on Tuesday. The budget allocates $79 billion in discretionary funding for ED and flat funds the Pell Grant, Federal Supplemental Educational Opportunity Grant (FSEOG), and Federal Work-Study (FWS) programs at the 2025 fiscal year amounts. The budget law also includes provisions that would block funding for ED from being transferred to other agencies, unless specified in the appropriations law.

Student Loan Default

Are Your Loans Nearing Default?

Loans enter a delinquency status the first day after a missed payment. Below are three tips to help prevent entering loan default:

1. Check your loan status. Borrowers may be at risk for future wage garnishment if the loans have been moved to ED's collection agency, the Default Resolution Group. Log into your online account at your loan servicer’s website to check the loan balance is listed and active. If you are unsure who your loan servicer is, you can look it up by logging into studentaid.gov, navigating to your “Dashboard” and then the “My Loan Servicers” section.
2. Explore different repayment options. You may be eligible for a more affordable payment plan based on your income. You can apply online for an income-driven repayment plan.
3. Apply for a deferment or forbearance. Both options would put a temporary pause on repayment for a period of time. You can apply online through your loan servicer.

Are Your Loans in Default?

Loans enter default after 270 days have passed without making a loan payment. There are three ways to get out of default:

1. Pay the loan in full. Contact the Default Resolution Group or visit myeddebt.ed.gov to confirm the amount owed.
2. Rehabilitate the loan. Loan rehabilitation involves making nine consecutive, on-time payments based on income. This option takes longer to get out of default but can save on overall collection costs.
3. Consolidate the loans. Consolidation combines multiple loans into one loan with new loan terms. Once the consolidation is complete, the borrower is eligible for lower monthly payments, and the loan status is restored to good standing. Apply for loan consolidation here.

For more information on getting out of default and comparing your options, click here.

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