Student loan info you need to know.

Step one: Let’s go over some common terms to avoid confusion.

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  APR versus interest rate

  APR versus interest rate

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  • What’s the difference?
  APR, which stands for annual percentage rate, is the interest rate plus any fees your lender may add to the principal loan amount. The interest rate alone is what you’re being charged to borrow money from your lender, expressed as a percentage of the principal loan amount.

  • Which fees are typically included in an APR?
  The most common fee included in an APR is the student loan origination fee. This fee is typically based on a percentage of the total loan amount and gets deducted from the funds you receive before the loan is disbursed. Some lenders—like SoFi—don’t charge any fees.

  • How do interest rates work?
  The interest rate represents the amount your lender is charging you to borrow money. It’s expressed as a percentage of your loan amount (or principal) and doesn’t reflect any fees or other charges that might be connected to your loan.

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  Fixed versus variable rate

  Fixed versus variable rate

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  • What’s the difference?
  True to its name, a fixed interest rate does not change—it remains the same throughout the life of a loan, whereas a variable rate fluctuates with changes in the market.

  • When might a fixed rate make sense?
  If you like the security of knowing exactly what your monthly payment will be over the life of your loan, a fixed-rate loan is a good option. This consistency makes budgeting easier and offers peace of mind in times of economic uncertainty.

  • When might a variable rate make sense?
  A variable-rate loan can benefit borrowers in a declining interest-rate market because their monthly payment will decrease as well. However, when interest rates rise, borrowers who hold a variable-rate loan will find that their monthly payment also increases.

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  Federal versus private loan

  Federal versus private loan

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  • What’s the difference?
  Federal student loans are funded by the government—they can be subsidized or unsubsidized. Private student loans are not associated with the government, so their repayment terms vary from lender to lender. Unlike federal loans, interest rates can be either fixed or variable.

  • How do I know whether my loan is federal or private?
  To figure out whether your student loan is federal or private, visit the National Student Loan Data System (NSLDS). The database is a collection of information on student loans that aggregates data from universities, federal loan programs, and more.

  • What are the benefits of a federal student loan?
  Federal student loans include benefits not typically offered by private lenders, including income-based repayment, public service loan forgiveness, and deferment options.

  • What are the benefits of a private student loan?
  The benefits of a private student loan include higher loan amounts, your choice of fixed or variable interest rates, and a quick application process, among others.

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Step two: Let’s get a clearer idea of how the
federal government could impact your loans.

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  Department of Education

  Department of Education

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  • Historical role
  While the responsibility for education in the U.S. largely falls to states and local municipalities, the Department of Education has historically provided funds to help schools and districts reach their goals. Further, the Department of Education has managed the federal student loan program.

  • Potential closure
  A March 2025 executive order required the Department of Education to close “to the maximum extent appropriate and permitted by law.” Fully closing it would require Congress to act. But the order could lower the workforce and significantly reduce services. The Small Business Administration has been ordered to take over the federal student loan portfolio, but details and timing are not yet clear.

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  Forgiveness programs

  Forgiveness programs

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  • What is available?
  The last few years have seen a lot of change to student loan forgiveness. While some forgiveness was blocked by court action, other forgiveness programs could still remove some or all of borrowers’ remaining student debt.

  • Income-driven repayment
  An income-driven repayment (IDR) plan could give eligible borrowers a more affordable monthly payment based on income and family size. After enough qualifying payments on an IDR plan, your remaining balance could be forgiven. Options have changed, and may do so again. Visit StudentAid.gov for updates.

  • Sample plans
  Online applications are available for Income-Contingent Repayment (ICR), Income-Based Repayment (IBR), and Pay As You Earn (PAYE). The Saving on a Valuable Education (SAVE) Plan remains blocked by court action. Public Service Loan Forgiveness (PSLF) could forgive the remaining balance on a federal Direct loan for borrowers in public service careers after enough qualifying payments.

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  Executive orders

  Executive orders

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  • What do they cover?
  Published in the Federal Register, executive orders are directives from the President of the United States to manage operations of the executive branch of the federal government. Although executive orders have historically related to administrative matters and internal operations of federal agencies, recent presidents have used executive orders more broadly to carry out policies and programs. They may be revoked by the President at any time. See 2025 executive orders.

  • How do recent orders affect student debt?
  Issued March 7, 2025, the executive order Restoring Public Service Loan Forgiveness directs the Public Service Loan Forgiveness (PSLF) program to now exclude organizations that engage in activities that have a “substantial illegal purpose” such as illegal immigration, terrorism, child abuse, discrimination, and public disruptions. It aims to ensure “only legitimate public servants benefit.”

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