Las Vegas borrowers are facing important changes in federal student loan repayment as 2025 brings sweeping reforms nationwide. With many students and graduates from institutions such as the University of Nevada, Las Vegas (UNLV), and the College of Southern Nevada, these new policies significantly impact how education debt is managed locally.

From the Strip’s workforce to the city’s growing young professional population, the resumption of interest, streamlined repayment options, and tighter forgiveness rules are reshaping financial planning for many.

Here are the five key student loan changes Las Vegas borrowers need to know this year.

1. Interest Charges Resume After Pandemic Pause

Federal student loan interest, suspended since 2020 due to COVID-19 relief efforts, resumed in August 2025. Borrowers in Las Vegas now face interest rates between 4% and 7.5%, depending on their loan type.

Given the city’s high cost of living and variable income levels—particularly in service and hospitality sectors—this return to accruing interest is putting added pressure on monthly budgets. Many borrowers who kept up payments during the pause are now seeing their loan balances increase due to compounding interest. Financial counselors report growing demand for budgeting assistance and income-based plan recalculations as monthly loan obligations increase.

2. Repayment Plans Simplified to Two Main Options

The federal repayment system has been simplified to two core plans: the traditional 10-year Standard Repayment Plan and the Repayment Assistance Plan (RAP). RAP adjusts payments based on income and family size and can extend loan terms up to 30 years.

Las Vegas borrowers who relied on older income-driven plans like PAYE or SAVE must transition to RAP or the standard plan. While the new system aims for simplicity, RAP’s longer terms and stricter forgiveness conditions have raised concerns, especially for workers with fluctuating income in the hospitality and entertainment industries.

New borrowers will be automatically enrolled in RAP beginning in 2026, with existing borrowers transitioned by 2028. Local financial aid offices and nonprofit organizations in Las Vegas are increasing outreach efforts to help borrowers understand and adapt.

3. Default Collections Have Restarted

Federal student loan collections resumed in 2025 after pandemic suspensions ended. Borrowers in default are now subject to wage garnishments, tax refund intercepts, and other collection actions.

In Las Vegas, many borrowers were unaware their loans had defaulted during the pause. This has led to a surge in requests for financial counseling and legal aid from local nonprofits working to assist borrowers in regaining good standing through loan rehabilitation or enrolling in RAP.

4. Forgiveness Eligibility Now More Restrictive

The Public Service Loan Forgiveness (PSLF) program remains in place but now only counts payments made under RAP toward forgiveness. For Las Vegas public workers—including teachers, healthcare professionals, and government employees—this means switching plans is necessary to maintain eligibility.

With the discontinuation of shorter forgiveness pathways from previous plans like SAVE and PAYE, many borrowers now face longer repayment horizons before qualifying for loan forgiveness.

5. Federal Loan Caps Enforced

Federal student loan borrowing limits are now in effect. Undergraduate Parent PLUS loans are capped at $65,000, and graduate loans at $100,000, with exceptions up to $200,000 for certain high-cost professional degrees.

This cap impacts many students at UNLV and other local colleges, especially those pursuing advanced degrees. Some borrowers are turning to private loans or alternative funding sources to fill gaps created by these new limits.

Financial aid advisors recommend exploring scholarships, grants, and cost-saving measures to reduce reliance on loans.

The 2025 federal student loan reforms present significant challenges and changes for Las Vegas borrowers. From the return of interest charges to fewer repayment choices and tighter forgiveness rules, adapting to this new landscape is essential.

Local resources and counseling services can help borrowers navigate these changes and plan for sustainable repayment strategies amid the city’s unique economic environment.

Whether you’re a new borrower starting college or a professional looking toward forgiveness, staying informed and proactive is the best way to navigate this new landscape. Talk to your loan servicer, attend financial aid webinars, and don’t wait to adjust your repayment strategy.