Student loan debt in the United States totals over $1.7 trillion, held by more than 45 million borrowers. The landscape changed dramatically in 2023-2024 with the Supreme Court blocking broad cancellation and the rollout of the new SAVE income-driven repayment plan.
Federal vs Private: a crucial distinction
| Feature | Federal Loans | Private Loans |
|---|---|---|
| Interest rates | Fixed by Congress annually | Variable or fixed, market-based |
| Income-driven repayment | Yes — multiple IDR plans | No |
| PSLF eligibility | Yes | No |
| Deferment/forbearance | Generous options | Limited, lender-dependent |
| Cancellation programs | Several programs exist | None |
Income-Driven Repayment plans in 2026
IDR plans cap monthly payments at a percentage of discretionary income. After 20-25 years of payments, remaining balances are forgiven (though forgiven amounts may be taxable).
The SAVE Plan (Saving on a Valuable Education)
The Biden administration's SAVE plan was the most borrower-friendly IDR plan ever offered — capping payments at 5% of discretionary income for undergrad loans and providing faster forgiveness. As of 2026, the plan has been subject to significant legal challenges. Borrowers enrolled should monitor updates from the Department of Education.
Public Service Loan Forgiveness (PSLF)
After 120 qualifying monthly payments (10 years) while working full-time for a qualifying government or non-profit employer, all remaining federal loan balances are forgiven — tax-free. This is one of the most valuable programs for educators, nurses, social workers, and public employees.
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About the author
Enrique 'Kike' Faúndez is an Information Systems and Management Control Engineer from Universidad de Chile, with master’s degrees in Finance from Universidad de Chile and Industrial Engineering from Pontificia Universidad Católica de Chile. He has 15+ years of experience in regulated financial services across finance, operations, and digital product development. He founded CashControlly in Santiago, Chile, with the conviction that personal financial control should not be a privilege, but an accessible and well-designed tool.
- Master's in Finance, Universidad de Chile
- Master's in Industrial Engineering, Pontificia Universidad Católica de Chile
- Information Systems and Management Control Engineer, Universidad de Chile
- AI and ITIL certifications
- 15+ years in regulated financial services
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