Student Lending
The Attorney General's Office is a national leader in investigating and enforcing consumer protection violations in the higher education field. Ours was the first state Attorney General's Office to file lawsuits against emerging student loan debt scams, leading the investigation into Sallie Mae (now Navient), and pursuing litigation against national for-profit colleges for fraudulent marketing practices.
The Attorney General's Office also created the Student Loan Helpline, 1-800-455-2456, to provide struggling student borrowers with free resources about repayment options and information on avoiding default. Individuals with hearing or speech disabilities can reach us by using the 7-1-1 relay service. Borrowers can also use the helpline to learn about filing consumer complaints for loan billing and servicing issues.
Recent Actions and Announcements
July 1, 2026 | Many Effects of the July 4, 2025 Budget Reconciliation Act Begin
The One Big Beautiful Bill Act made significant changes to federal student loan repayment options for direct loan borrowers. The bill phases out the SAVE, PAYE, and ICR plans and introduces the new Repayment Assistance Plan (RAP) and new Tiered Standard Plan. It also limits repayment options for Parent PLUS borrowers.
For non-Parent PLUS direct loan borrowers, if all your loans were disbursed or consolidated before July 1, 2026, you will be eligible for…
- a new IDR plan called RAP, which became available on July 1, 2026;
- a modified version of the IBR plan (with no income eligibility requirement); or
- the existing Standard, Graduated, or Extended plans.
If any of your loans will be disbursed or consolidated on or after July 1, 2026…
- In most instances, only two plans will be available: a new Tiered Standard Plan and RAP, a new IDR plan. The ICR, PAYE, SAVE, IBR, old Standard, Extended, and Graduated plans will not be available. Parent PLUS borrowers will only be eligible for the Tiered Standard Plan, which does not count for PSLF forgiveness. Remember, the date the loan was disbursed, not the date you applied for the loan, is what matters.
The budget reconciliation bill ended the partial financial hardship requirement for borrowers trying to enroll in the income-based repayment (IBR) plan. The budget reconciliation bill also ended the Grad PLUS loan program for new borrowers, effective on July 1, 2026, and put new limits on the amount of money that student loan borrowers can take out to attend school. The U.S. Department of Education provides updates online at studentaid.gov/announcements-events/big-updates.
June 18, 2026 | Department of Education Announces New Autopay Discount
Normally, all borrowers enrolled in autopay receive a 0.25% interest rate reduction; however, the U.S. Dept. of Education has increased this reduction to 1% if you enroll in autopay by September 30, 2026. This 1% interest rate reduction will last until June 30, 2028 and is available for Direct loans made on or after July 1, 2012.
January 15, 2026 | Department of Education Announces Temporary Pause on Involuntary Collections The Department of Education announced it would temporarily pause the involuntary collections of its defaulted federal student loan portfolio. Borrowers in default, or in danger of default, should take action before involuntary collections, including wage garnishment and tax refund withholdings, resumes. Borrowers can call the Treasury Offset Program at 1-800-304-3107 to learn if their tax refunds will be withheld. The U.S. Department of Education has information available at studentaid.gov/manage-loans/default. Be proactive and login to your studentaid.gov to make sure you are not in danger of delinquency or default.
Preparing for College
It is never too early to begin planning for college. Parents can set up Illinois 529 college savings accounts to help save for their children's future education costs. Learn more about 529 plans through Illinois State Treasurer’s Office website. The Illinois Student Assistance Commission (ISAC) provides free resources for planning and paying for college, including how to fill out the Free Application for Federal Student Aid form called FAFSA. ISAC also provides awards to eligible students and former students to help cover education costs.
Managing Your Student Loans
FOR LENDERS: Know Before You Owe
Signed into law on August 26, 2021, the Know Before You Owe Private Education Loan Act (“Know Before You Owe Act”), Public Act 102 0583, provides student loan borrowers with critical information about their eligibility for federal financial assistance before those borrowers take out a private education loan at an institution of higher education. Under the law, private lenders also have annual reporting requirements that are monitored by the Illinois Attorney General's Office.