It's not just school districts adjusting their budget.

Starting this year, there will be some changes to the federal student loan repayment program.

Our Emily Sisk caught up with an expert to explore the changes that could impact more than 600,000 Kentuckians with unpaid student loans.

We are joined now by Scott Buchanan, the executive director of the Student Loan Servicing Alliance.

Coming to us from Washington, D.C., we so appreciate you being here.

And we know it's a new year, 2026.

And there are several changes that have come down the pike as far as student loan repayment.

So what do Kentuckians need to be aware of when it comes to federal student loan repayment plans and the new programs that are out there for that?

Yeah, absolutely.

And, Emily, thanks for having me here today.

Yeah.

26 is upon us.

And, there are a lot of changes that are to be coming this year, to the federal student loan program, in particular on repayment plans.

It's important to remember if you had loans that you took out 5 or 6 years ago.

A lot of the repayment options that were available then are going to still be available for you.

So you'll still have access to the original standard repayment plan.

You'll still have access to an income based repayment plan.

And effective July 1st of 26, you'll actually have access to a new repayment plan, the Rat plan, the Repayment Assistance Plan.

And for those who are new borrowers going forward, there'll be a new standard plan that is very similar to, you know, a mortgage, repayment plan where it's set based upon the balance of the loan.

But you'll also be able to access that income driven repayment plan.

I mentioned the repayment assistance plan, which is based upon your income level.

So as your income rises, and, you will have a larger and larger percent that is owed on that student loan.

For some folks who make very low income, that repayment amount will be 1% of your, of your discretionary income.

I want to switch gears a little bit.

Also on the topic, of course, of federal student loan repayment, but a big subject has been wage garnishment, which is starting up this year under the Trump administration.

For people who are watching and might say, like I was earlier, what is wage garnishment?

What is it and how might folks be eligible for it?

Sure.

Wage garnishment is a program that's been around for decades, right across multiple administrations.

Wage garnishment was paused under the Covid, situation, and was scheduled to resume.

Really?

What wage garnishment is, is it is a program that the government, goes to your employer and says, hey, borrower X, your employee is not paying on their student loan.

We're going to take part of their income.

This is really a program that only impacts people who have defaulted on their student loans.

We know that.

Also, it wouldn't be a surprise, right?

You wouldn't just see your paycheck and say it's less, you should receive something in the mail.

And also it's not necessarily a done deal.

People do have an option to object to the wage garnishment, right?

Tell us more about that.

That's correct.

So before your wages start getting garnished, you will be notified that that's forthcoming.

You'll get a letter or an email depending upon how you selected to be reached out to.

And that will notify you, that in the next 30, 60 days, wage garnishment could begin.

And that's your final opportunity, right, to reach out to the department and find some other solution before that happens.

Lastly, Mister Buchanan, just to put this in perspective, can you tell us how many Kentuckians are out there who have unpaid federal student loans and what would your advice be to that population?

Yeah, there are roughly about 90,000 folks in the state of Kentucky, who have defaulted student loans.

So who might be eligible for that wage garnishment?

And roughly the average balance is around $20,000 that people still owe on those loans.

So in my advice to those folks, if you are one of those people who is in default, now is the moment to pick up the phone, call the Department of Education and say, listen, what are the options that are available for me?

The best thing, I think, for almost all borrowers is something called loan rehabilitation.

The Department of Education is able to set a reasonable and affordable monthly payment that you'll pay under that plan.

Getting that, default off your credit history, can be incredibly beneficial.

And the only way you could do that is by loan rehabilitation.

All right, well, there we go.

Great information.

It can be like drinking from a fire hose, right?

But it's if you stay on top of it, you can keep track of it.

And stay on top of it in the new year.

Scott Buchanan with the Student Loan Servicing Alliance.

Thank you.

So much for breaking all this down for us.

Thank you for having me.

Of course.

Buchanan also recommends anyone with student loans to keep in touch with their loan servicer.

He says there are many options to help avoid defaulting on your student loan payments.