Student loan repayment continues despite Department of Education closure

President's recent executive order to close the federal Department of Education has created confusion for student loan borrowers. This move, which needs congressional approval, could impact the management of the nation's $1.6 trillion federal student loan portfolio. Over 40 million borrowers rely on the Department of Education to manage their loans and repayment plans. Despite the uncertainty, borrowers are still required to make their monthly payments. The terms of their loans remain intact under the original agreements. Missing payments can lead to serious consequences. Loans become delinquent if a payment is missed, and this status lasts until the overdue amount is paid. If a loan is delinquent for more than 90 days, it will affect borrowers' credit scores. After 270 days of non-payment, the loan enters default, which brings harsher penalties. The shutdown also raises questions about loan forgiveness programs. Borrowers using income-driven repayment plans could face delays and policy changes. They are advised to keep detailed records of payments and communication with loan servicers. The administration intends to address fraudulent activities within the student loan system, but critics worry that dismantling the Department of Education may cause more chaos. For now, experts recommend that borrowers continue making payments, document all transactions, and stay informed about any changes. Keeping in touch with loan servicers for confirmation of loan details is also crucial. Despite the challenges ahead, maintaining regular payments will help borrowers avoid the negative effects of missed payments.