Nevada borrowers are facing significant federal student loan changes in 2025 that will impact how they manage and repay their education debt. From Las Vegas to Reno and smaller communities across the state, students and graduates attending institutions like the University of Nevada, Las Vegas (UNLV), University of Nevada, Reno (UNR), and community colleges are navigating a transformed borrowing landscape.

These policy shifts—from the return of interest to streamlined repayment options and tougher forgiveness eligibility—are reshaping financial realities for thousands of Nevadans. Understanding these changes is critical as many residents work to balance loan repayment with everyday living costs, particularly in a state where the cost of living has been rising steadily.

Here’s an overview of the top five student loan repayment changes that Nevada borrowers need to be aware of in 2025.

1. Interest Charges Resume After Pandemic Pause

The federal government paused interest accrual on student loans starting in early 2020 as part of the COVID-19 relief efforts. This pause ended in August 2025, and borrowers across Nevada are once again seeing interest begin to accumulate on their federal loans.

Interest rates vary between 4% and 7.5%, depending on the loan type. For many borrowers in Nevada—where student loan balances often range from $20,000 to over $50,000—this means monthly payments are increasing as unpaid interest compounds.

The resumption of interest is not retroactive, meaning no interest is charged for the paused period, but moving forward, borrowers will see their balances grow unless they pay down principal quickly.

This change has a significant impact in cities like Las Vegas and Reno, where wages in service industries and other sectors may not always keep pace with rising debt costs. Financial counselors have noted a growing need for budgeting assistance as borrowers adjust to these renewed expenses.

2. Federal Repayment Plans Simplified to Two Options

Previously, borrowers had access to multiple income-driven repayment plans such as PAYE, SAVE, REPAYE, and others. In 2025, these options have been streamlined to just two core plans:

• The Standard 10-Year Repayment Plan with fixed payments
  
• The new Repayment Assistance Plan (RAP), which bases payments on income and family size and extends repayment up to 30 years
  

This simplification aims to reduce confusion and make repayment easier to navigate. However, some Nevada borrowers have expressed concerns that RAP’s longer terms could lead to paying more interest over time and delay loan forgiveness.

Starting in 2026, all new federal borrowers will be automatically enrolled in RAP unless they choose otherwise. Existing borrowers on older plans will transition to RAP or the standard plan by 2028.

Nevada’s colleges and nonprofit counseling centers are working to inform borrowers about the new repayment structure and assist them in selecting the best option for their financial situation.

3. Default Collections Restarted After Pandemic Suspension

One of the most significant shifts in 2025 is the resumption of federal loan collections on accounts in default. During the pandemic, wage garnishments, tax refund interceptions, and other enforcement actions were paused to provide relief.

Now, with collections active again, borrowers in default—estimated to number over 200,000 in Nevada—are facing renewed garnishments and federal collection efforts.

Many borrowers were unaware their loans had entered default during the pause, and this has led to a surge in calls to legal aid organizations and financial counseling agencies in Nevada.

Those in default are encouraged to seek loan rehabilitation programs or enroll in RAP to restore good standing and stop collection activities.

4. Forgiveness Eligibility Narrowed Significantly

Federal loan forgiveness programs have become more restrictive in 2025. The Public Service Loan Forgiveness (PSLF) program remains in place but now only counts payments made under RAP toward forgiveness.

This change affects many Nevadans employed in public service fields—such as teachers in Clark County School District, healthcare workers, and government employees—who must now ensure they are enrolled in RAP to continue qualifying for PSLF.

Other forgiveness programs tied to older plans like SAVE and PAYE have been discontinued for new borrowers, effectively extending repayment periods by 5 to 10 years for many.

Additionally, a significant backlog in forgiveness application processing has left many Nevada borrowers uncertain about their status, creating frustration and financial planning challenges.

5. Federal Loan Borrowing Caps Implemented

For the first time, federal student loan borrowing is subject to strict limits:

• Undergraduate Parent PLUS loans capped at $65,000
  
• Graduate loans capped at $100,000
  
• Exceptions up to $200,000 for high-cost professional degrees such as medicine or law
  

These caps are already impacting many Nevada students, especially those attending universities with higher tuition costs or pursuing advanced degrees.

As a result, some borrowers are turning to private loans or alternative funding sources to cover education costs beyond federal limits.

Nevada’s financial aid offices recommend exploring scholarships, grants, and in-state public school options to reduce dependence on loans and avoid excessive debt burdens.

What Nevada Borrowers Should Do Next

The 2025 student loan reforms mark a major turning point for borrowers in Nevada. With interest back on loans, fewer repayment plan options, stricter forgiveness rules, and borrowing limits, staying informed is essential.

Nevadans should:

• Review their current repayment plan and consider whether RAP or the standard plan fits best
  
• Explore loan rehabilitation or alternative repayment options if in default
  
• Monitor forgiveness application status and prepare for longer repayment timelines
  
• Consult financial aid advisors and nonprofit counseling organizations for personalized support
  
• Budget carefully to manage renewed interest charges alongside living expenses
  

These changes will require many borrowers to adjust their strategies and planning to maintain financial stability while repaying education debt.