On July 4th of 2025, the current administration signed into law the “One Big Beautiful Bill Act.” This new legislation is completely overhauling the federal student loan system, with current borrowers bracing for stark changes.
Roughly 7.7 million people in the U.S. were enrolled in the previous administration’s SAVE plan, which is coming to an end. Many experts believe that this change will add to the financial burden facing millions of Americans.
This change increases the likelihood of your customers balancing multiple debts, and could have real effects on debt repayment communication strategies. Join us as we break down this landmark change, and how your business can build trust with borrowers.
Important Changes on Student Debt That Impact Debt Recovery Services
The One Big Beautiful Bill Act is changing a lot for current and new student loan borrowers. It will likely take time to cause big impacts, but it’s important for businesses to start thinking about how to change their approach to debt repayments now. There are several key factors your business needs to know:
- Interest for student loans on the SAVE plan will resume on August 1, 2025. This means that monthly payments for student loan debt are going to increase, and could push more student loan or other accounts into delinquency in the short term as borrowers try to manage budgets.
- The new Bill is creating the Repayment Assistance Plan (RAP), which is an income-based plan calculated for each borrower. Compared to the old plans, RAP does waive interest and requires a longer period of time (30 years) of qualifying payments before being eligible for cancellation.
- Under RAP, borrowers will not be able to defer loan payments in the event of economic hardship like unemployment starting on July 1, 2026. Some experts fear this could cause a domino effect for people with multiple debts, with delinquent student loans sparking delinquency for other accounts.
How to Talk to Customers with Student Loan Debt
With student loans being one of the most common types of debt in the country, it’s likely that some of your customers hold this kind of financial obligation and may be struggling with repayment. In fact, according to an analysis done by TransUnion in April, 5.8 million people were at least 90 days behind on their student loan payments. And the new rules could raise this number even higher. It’s one of the main reasons why debt collection strategies could get more aggressive as more student loan changes take effect.
For companies collecting on student loan debt, phone calls and physical mail are still the primary communication channels. As the new rules take effect, borrowers will likely receive an avalanche of notifications on the new procedures to follow and reminders to make payments. That means more competition for your customer’s attention through these channels.
With your customers potentially being contacted by multiple businesses and/or creditors, communications that capture their attention and honor their preferences are more likely to earn engagement.
Consider Using a Digital Communication Strategy for Debt Repayments
If your business is trying to improve the performance repayment communications, consider using an omnichannel approach that incorporates consumer-preferred digital channels. And to implement digital communications at scale, there are software-as-as-service (SaaS) tools that automate outreach.
Digital communications are where most consumers prefer to be contacted about financial matters. Email continues to be the most preferred platform with people in younger generations like Gen Z and Millennial (also more likely to have student loans), prefer to get text messages for financial matters. Your business can also avoid the challenges of setting up your own digital communication delivery system by using tools like Retain by TrueML Products.
Retain is a white-label SaaS tool that lets your business automate digital communications to customers. It’s powered by a patented machine learning algorithm that leverages data from millions of customer interactions to determine the best time, message and channel for each unique customer.
Empathy Will Be in High Demand from Consumers
Student loan borrowers are going through a whiplash. Many of them were counting on loan forgiveness or certain payment plans, and now the rules are changing. Dealing with sensitive financial issues can be stressful, and the risk of added financial burden is adding fuel to the fire of consumers wanting more empathy from businesses they interact with. A recent Salesforce consumer study revealed that 68% of consumers expect brands to show empathy.
When someone needs to make payments to multiple businesses, the ones that extend empathy are going to stand out. The root of empathy in this case is showing your customers that you understand their challenges. Roughly 66% of consumers expect companies to know their unique needs. This creates an opportunity for your business, since it’s common for debt repayment communications to take a one-size-fits-all approach.
A great way to extend empathy to your customers is through the tone of content that’s used in your digital communications. Simple additions like adding more understanding language or even an animated gif to encourage a smile goes a long way. Another good strategy is to offer customers more options and flexibility for repayments. This shows that you’re taking their financial needs into account.
Empathy is the path to building trust with student loan borrowers, and more trust increases the chance of them making debt payments.
Talking to Customers with Student Loan Debt is Easier with Retain
Odds are, some of your customers are dealing with changes to student loans. And as the landscape surrounding student loan debt changes, Retain’s AI can learn from customer interactions to optimize for better engagement.
If your business wants to stay ahead of all the variables that affect debt repayment, Retain’s automated digital communication platform is the answer. Contact our team to schedule a consultation today.
