This story was reported and written by our media partner Capital News Service.
Changes in student loan repayment plans have coincided with the government shutdown, which could leave Virginia borrowers in limbo.
The Department of Education announced plans to send home 87% of its employees, including around 85% of Federal Student Aid employees, during the shutdown, according to its posted contingency plan. This comes after a promise in March to reduce staff by nearly around 50%.
Federal student loans will be disbursed despite the shutdown. Borrowers will still be expected to make payments on outstanding student debt.
The U.S. government has attempted to find remedies in response to the steady rise of student loan debt, but has been largely unsuccessful, according to Alan Collinge, founder of Student Loan Justice.
“None of those plans are at all trustworthy,” Collinge said. “My best estimate is that well over 90% of all borrowers in past programs have been disqualified out of those plans before getting the promised forgiveness.”
Former President Joe Biden introduced the Saving on a Valuable Education, or SAVE, plan to help combat student loan debt.
The program relied on an income-driven repayment plan that could have seen people’s debt gone in as few as 10 years. The Biden administration estimated that more than 20 million people could benefit and encouraged people to apply.
Repayment plans were overhauled under President Donald Trump’s budget reconciliation bill. This includes the SAVE plan being axed entirely by 2028 at the latest, according to the National Consumer Law Center.
Interest charges restarted for people enrolled in SAVE as of Aug. 1, which means the loans will collect interest while borrowers search for a new plan.
Virginia is one of the leading states in student loan debt, according to federal data. In Virginia, 55% of college graduates have student loan debt, and the average debt exceeds $40,000.
Student loan debt sits at $1.8 trillion nationwide in 2025, according to the Federal Reserve. The federal student loan debt in Virginia totals $44.9 billion, according to the U.S. Department of Education.
For comparison, Virginia’s federal student loan debt is 1.5 times higher than the state’s annual education budget, which includes K-12, higher education and administrative support spending, according to the state budget. The loan amounts could rise as tuition increases.
Annual interest accrued from Virginia borrowers totals $2.8 billion, according to the grassroots organization Student Loan Justice, which was founded in 2005.
In some states, the amount of interest taken from student loans rivals earnings from major industries, according to Collinge. Virginia’s combined soybean, chicken, pork and tobacco exports compete with the annual interest from these loans, he said.
In-state students have seen tuition costs rise in recent years, with the average of a 2% increase from 2024-2025. Some Virginia colleges and universities like Virginia Commonwealth University and Virginia State University have seen an over 4% increase in tuition and fees in that time.
This uncertainty and the rise of loan interest rates affects financial stability and career choices, according to Amy Pridemore, executive director for the VCU Financial Success Center.
People now wait longer to start families and are unable to buy homes and cars, Pridemore said. Student loan debts take precedent over other debts like mortgages, which halts the ability to make major purchases that build assets and wealth over time.
“That means that money is not being sent elsewhere in the economy,” Pridemore said. “They might not have as much discretionary spending because there’s so much of their disposable income that is going to pay down these student loans instead.”
Student loan debt is one of the only forms of debt that cannot be cleared when someone files for bankruptcy. It is relatively easy to pile on the debt when in higher education because so few people are unaware of the implications of the loans they take on, according to Pridemore.
“Even if you got rid of all of your other debt, student loans will live with you forever until they’re paid off,” Pridemore said.
There are more borrowers over the age of 35 in Virginia, but they borrowed less money per person, according to the Department of Education. People over 35 owe $29 billion, nearly double the amount compared to people under 35 who owe nearly $16 billion.
Student loan debt affects people in a variety of professions. Even perceived high-paying careers like doctors struggle to repay the accumulated debt, according to Michael York, a registered nurse in Richmond. Student loan companies monopolize higher education, and many have little choice but to deal with it, he said.
“I don't fault people for having to take student loans,” York said. “I just wish it wasn't like for-profit companies that are giving out student loans and making money off people who are trying to further their education.”
The Trump administration has also been accused of taking borrowers’ tax refunds with no required notice to offset the student loans, according to Democratic Maryland lawmaker U.S. Rep. Jamie Raskin. This comes after the administration announced in April that it would resume collection activity after a half-decade pause due to COVID-19.
Capital News Service is a program of Virginia Commonwealth University’s Robertson School of Communication. Students in the program provide state government coverage for a variety of media outlets in Virginia.