Student Loan Forgiveness & Repayment Plans: Your 2025 Guide for Texas

The landscape for student loans is evolving rapidly in 2025. For Texas borrowers, understanding loan forgiveness, repayment plan updates, and recent policy changes can mean the difference between a decade of debt or genuine relief. This guide provides Texas-specific insights, step-by-step walkthroughs, and recent success stories, helping you make informed decisions about your federal and state student loans.

What’s New for Texas Borrowers in 2025?

• SAVE Plan Refinements: Even lower payment calculations and improved spousal exclusion rules.
• PSLF Simplification: Expanded eligibility for adjunct faculty and state government workers; improved tracking tools.
• Updated Income-Driven Repayment (IDR) Options: Flexible recertification requirements and faster forgiveness for low-balance borrowers.
• Texas-Specific Relief: New enhancements to the College Access Loan (CAL) Program and Texas Public Service Loan Repayment Assistance.

SAVE Plan in 2025: Key Changes and Texas Impact

The Saving on a Valuable Education (SAVE) Plan is now the primary federal income-driven repayment plan for most borrowers. Here’s what Texas borrowers should know in 2025:

• Payment Calculations: Undergraduate loans: 5% of discretionary income; Graduate/professional loans: 10%. If you have both, a weighted average applies.
• Poverty Line Adjustment: 225% of federal poverty guidelines now excluded from income calculation. In Texas (family of 2), that’s approximately $45,900 exempted.
• Spousal Income: Married borrowers can exclude their spouse’s income by filing taxes separately.
• Early Forgiveness: Loans under $12,000 forgiven after 10 years of payments, instead of 20-25.

Example: Derrick from Austin had $36,000 in undergrad debt. On the SAVE plan, his monthly payment dropped from 0/month (old REPAYE plan) to /month, and his scheduled forgiveness moved to year 2029 instead of 2032 due to extra qualifying months from COVID relief.

Need capital? GHC Funding offers flexible funding solutions to support your business growth or real estate projects. Discover fast, reliable financing options today!

Test Your Expertise: The Complexities of the 1031 Exchange

As a sophisticated real estate investor, you understand that the 1031 Exchange is a cornerstone strategy for tax deferral and wealth accumulation. But beyond the basics, the intricacies of the 1031 Exchange rules can pose significant challenges. This quiz is designed to test your in-depth knowledge and highlight critical nuances that separate casual investors from true experts in 1031 Exchange transactions.

Instructions: Choose the best answer for each question.

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Question 1: Understanding "Like-Kind" in a 1031 Exchange

Which of the following scenarios most likely qualifies as a like-kind property exchange under IRS Section 1031, allowing for 1031 Exchange tax deferral?

a) An investor exchanges a portfolio of publicly traded REIT stocks for a commercial retail building. b) An investor exchanges their primary residence, used for personal living for 15 years, for a duplex intended for rental income. c) An investor exchanges raw land held for appreciation in Texas for a stabilized apartment complex in Florida, both held for investment. d) An investor exchanges a classic car collection (personal property) for a single-family rental home (real property).

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Question 2: Navigating the 45-Day Identification Period for a 1031 Exchange

An investor sells a multi-family property on June 15th for a 1031 Exchange. According to the strict timelines, by what date must they identify their replacement properties to comply with the 1031 Exchange requirements?

a) July 30th of the same year, as the 45-day period includes weekends and holidays. b) August 29th of the same year, allowing for an extra 45 days if needed. c) December 12th of the same year, aligning with the 180-day completion period. d) January 1st of the following year, if they plan to file for an extension.

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Question 3: The Role of a Qualified Intermediary (QI) in a 1031 Exchange

Why is the engagement of a Qualified Intermediary (QI) absolutely critical for the validity of a 1031 Exchange?

a) The QI provides investment advice and helps the investor choose the best replacement property for their 1031 Exchange strategy. b) The QI acts as a liaison with the IRS, directly negotiating tax liabilities related to the 1031 Exchange process. c) The QI holds the proceeds from the relinquished property's sale, preventing the investor from having "constructive receipt" of funds, which would invalidate the 1031 Exchange. d) The QI provides legal and tax advice to ensure the 1031 Exchange is perfectly compliant

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Question 4: Understanding "Boot" and its Impact on a 1031 Exchange

An investor sells a commercial building with $500,000 in equity for a 1031 Exchange. They purchase a replacement property for $450,000, effectively reducing their debt by $50,000. What is the tax implication of this scenario within the 1031 Exchange framework?

a) The entire 1031 Exchange is disqualified because the investor "traded down" in value. b) The $50,000 in reduced debt is considered "boot" and will be immediately taxable as partial gain in this 1031 Exchange. c) There are no immediate tax implications, as the primary goal of the 1031 Exchange is only about the "like-kind" nature of the properties. d) The investor can defer the $50,000 as long as they pay off other personal debts with the funds, still qualifying for a full 1031 Exchange.

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Question 5: Advanced 1031 Exchange Strategies & Flexibility

An investor aims to sell a highly appreciated single-tenant retail property and replace it with multiple smaller, diversified multi-family units to spread risk. Which of the following 1031 Exchange identification rules best allows for this diversification strategy, maintaining eligibility for a 1031 Exchange?

a) The "Three Property Rule," where the investor can identify up to three properties of any value, regardless of the relinquished property's value, for their 1031 Exchange. b) The "200% Rule," allowing identification of any number of properties, provided their aggregate fair market value does not exceed 200% of the relinquished property's value for the 1031 Exchange. c) The "95% Rule," which states that if more than three properties are identified, the investor must acquire at least 95% of the aggregate value of all identified properties to qualify for the 1031 Exchange. d) All of the above are valid identification rules within a 1031 Exchange, offering flexibility for various investment strategies.

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The Ultimate DSCR Loan for Rental Property Quiz

Are you looking to expand your real estate investment portfolio? A DSCR loan might be the perfect tool to help you achieve your goals without relying on traditional income documentation. Test your knowledge with this quiz to see if you're ready to master the intricacies of a DSCR loan for rental property.

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Page 1 of 5

What is the primary factor a lender considers when approving a DSCR loan for rental property? A) The borrower's personal income and debt-to-income (DTI) ratio. B) The borrower's credit score and employment history. C) The property's potential rental income compared to its monthly expenses, known as the Debt Service Coverage Ratio. This is the key metric for a DSCR loan for rental property eligibility and approval. D) The total value of the borrower's existing investment properties and personal savings.

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How does a DSCR loan for a rental property differ from a conventional mortgage for a personal residence? A) A conventional mortgage requires a DSCR calculation, whereas a DSCR loan for a rental property does not. B) A DSCR loan for a rental property primarily focuses on the property's cash flow, allowing investors to qualify without traditional income verification, unlike a conventional mortgage which is based on personal income and liabilities. C) A conventional mortgage has a higher interest rate and stricter requirements than a DSCR loan for a rental property. D) A DSCR loan for a rental property is only available for commercial properties, not residential rental properties.

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What is an ideal Debt Service Coverage Ratio (DSCR) for a lender when evaluating a DSCR loan for a rental property? A) A DSCR of 0.75, indicating the property generates 75% of the income needed to cover its debt service. B) A DSCR of 1.00, meaning the property's income exactly equals its debt service. C) A DSCR of 1.25 or higher, as this indicates the property's income is greater than its expenses, making it a strong candidate for a DSCR loan for a rental property and providing a buffer for unexpected costs. D) A DSCR of 2.00, which is the standard minimum for all investment properties, regardless of location or market conditions.

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Which of the following expenses are typically included in the calculation of the Debt Service Coverage Ratio for a DSCR loan for a rental property? A) The property's mortgage payment (principal and interest), property taxes, and insurance, which are the core components used to determine if the property can support the debt. B) The property's mortgage payment, property taxes, insurance, and the borrower's personal credit card debt. C) The property's monthly rental income and all utility bills, regardless of who pays them. D) Only the principal and interest payment of the loan, as other expenses are not considered in a DSCR loan for a rental property calculation.

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Who would most benefit from using a DSCR loan for a rental property? A) A first-time homebuyer with a W-2 salary and a high debt-to-income ratio, who is looking to purchase a primary residence. B) A seasoned real estate investor with multiple properties who wants to expand their portfolio without using personal income to qualify, making a DSCR loan for a rental property the ideal financing solution for their needs. C) Someone looking to finance a primary residence with a low down payment and a government-backed loan. D) An individual with a very low credit score who cannot qualify for any other type of loan.

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How to Enroll in SAVE:

1. Log in to studentaid.gov/idr/
2. Submit the application with income documentation (tax return or pay stubs)
3. Select the SAVE plan (or let system auto-enroll you if it’s most beneficial)
4. Recertify your income annually (now offered via IRS direct data retrieval for easier updates)

Public Service Loan Forgiveness (PSLF) 2025: Texas Opportunities

PSLF remains one of the most powerful federal forgiveness programs, especially for Texas public servants—including school district employees, Texas Health and Human Services staff, and local government workers.

• Eligibility: Work full-time for an eligible Texas public employer and make 120 qualifying monthly payments under a qualifying plan like SAVE.
• Expanded Employer List (2025): Now includes Texas county hospitals, state universities, and contract-based educators for ISDs.
• Simplified Annual Certification: Latest PSLF Help Tool syncs with Texas payroll records for faster form completion and employment confirmation.

Success Story: Maya of Dallas ISD — $89,000 forgiven in May 2025 after 10 years, including pandemic forbearance months. Maya was an elementary school principal; her entire federal debt balance was erased, and taxable income impact was zero (PSLF remains tax-free in Texas).

PSLF Application Steps:

1. Review employer eligibility using the PSLF Employer Search Tool.
2. Certify your employment each year via the PSLF Help Tool.
3. After 120 payments, submit final PSLF Application for Forgiveness via studentaid.gov/pslf/.
4. Monitor your progress on the MOHELA or servicer dashboard.

2025 Income-Driven Repayment Plans: What’s Changed?

✅ Small Business Resources 

• SBA – Small Business Administration
  https://www.sba.gov

• SCORE Mentors (Free Mentoring & Workshops)
  https://www.score.org
• Small Business Development Centers (SBDC)
  https://americassbdc.org

Are You an SBA Real Estate Loan Expert?

Test your in-depth knowledge on using SBA Loans for owner-occupied commercial Real Estate acquisition. These questions delve into the critical details that can impact your business's growth and financial strategy.

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Page 1 of 5

For an existing commercial property, what is the minimum owner-occupancy percentage required for an SBA 7(a) real estate loan, and does this specific scenario qualify?

A manufacturing company plans to acquire a 30,000 sq ft industrial real estate facility using an SBA 7(a) Loan. The company initially needs 18,000 sq ft for its operations and intends to lease out the remaining 12,000 sq ft.

A) 60%; Yes, it qualifies. B) 51%; Yes, it qualifies. C) 75%; No, it does not qualify. D) 60%; No, it does not qualify, as they are leasing out a portion.

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Which of the following sets most accurately represents additional cost categories that can typically be financed within an SBA 504 Loan for a commercial real estate project?

Hint: Beyond the straightforward purchase of a commercial real estate property, an SBA 504 Loan is highly effective for comprehensive projects.

A) Business inventory, working capital, and employee salaries. B) Building renovations, long-term machinery essential to operations within the property, and soft costs like architectural fees. C) Advertising expenses, short-term equipment leases, and utility deposits. D) Personal real estate investments, vehicles for personal use, and stock market investments.

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Between an SBA 7(a) Loan and an SBA 504 Loan, which program generally offers the lowest typical borrower down payment for a commercial real estate acquisition, and what is that common minimum percentage for established businesses?

A highly profitable professional services firm in a competitive market wants to purchase its office real estate with minimal upfront capital. The firm's owners prioritize cash flow and liquidity.

A) SBA 7(a) Loan; 15% B) SBA 504 Loan; 10% C) SBA 7(a) Loan; 5% D) SBA 504 Loan; 20%

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For new construction, what is the initial minimum owner-occupancy percentage required, and what is the maximum timeframe to meet the full owner-occupancy threshold, for an SBA Real Estate Loan?

A fast-growing tech startup plans to construct a new 50,000 sq ft headquarters using an SBA Loan. They will immediately occupy 35,000 sq ft and have a definitive plan to occupy the remaining 15,000 sq ft within two years as their team expands.

A) Initial 51%, full 80% within 5 years. B) Initial 60%, full 80% within 3 years. C) Initial 75%, full 100% within 1 year. D) Initial 51%, full 100% within 2 years.

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What is this crucial requirement, and what fundamental principle does it underscore for the lender?

When securing an SBA Loan for a commercial real estate purchase, principal owners with a 20% or greater ownership stake are almost universally required to provide a specific type of assurance beyond the collateral of the real estate itself.

A) A fixed-rate interest payment commitment, demonstrating long-term stability. B) A first-lien position on all personal assets, ensuring full recovery. C) A personal guarantee, signifying the owners' personal commitment to loan repayment. D) A business plan with projected revenue growth of at least 15% annually, showing future viability.

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The Department of Education now offers the following IDR plans:

• SAVE Plan (recommended for most)
• Income-Based Repayment (IBR)
• Income-Contingent Repayment (ICR)

✅ Real Estate Investor Resources

• AirDNA (Short-Term Rental Data)
  https://www.airdna.co

• Rentometer (Rent Comps)
  https://www.rentometer.com
• Zillow Research & Data
  https://www.zillow.com/research

DSCR Loan IQ Quiz!

Test your knowledge of Debt Service Coverage Ratio (DSCR) loans!

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Page 1 of 3

What is the primary factor a lender focuses on when approving a DSCR loan for an investment property? a) The borrower's personal debt-to-income (DTI) ratio b) The property's ability to generate enough income to cover its mortgage payments c) The borrower's credit score history over the past 10 years d) The total number of investment properties the borrower already owns

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If a property has a Net Operating Income (NOI) of $5,000 per month and its total monthly debt service (PITI) is $4,000, what is its DSCR? a) 0.8x b) 1.0x c) 1.25x d) 5.0x

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Which type of borrower most commonly benefits from using a DSCR loan? a) First-time homebuyers purchasing a primary residence b) Investors with a strong W-2 income and minimal tax deductions c) Self-employed individuals or those with complex income who want to avoid traditional income verification d) Homeowners looking to refinance their primary residence for a lower interest rate

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Key 2025 updates:

• Faster Forgiveness for Small Balances: Borrowers with original loans of $12,000 or less are eligible for forgiveness after 10 years (120 payments).
• Payment Pause Months Counted: The COVID-19 administrative forbearance counts toward IDR and PSLF eligibility (if other criteria met).
• Simplified Recertification: Borrowers can opt for automated income verification directly from the IRS.

Eligibility: All federal Direct Loan borrowers are eligible. Parent PLUS borrowers must consolidate into a Direct Consolidation Loan first.

Step-by-Step: Join an IDR Plan

1. Log in to your Federal Student Aid account.
2. Choose “Apply for an Income-Driven Repayment Plan”.
3. Follow instructions for selecting SAVE or another plan; provide updated income info.
4. Confirm enrollment confirmation from your loan servicer (typically within 3 weeks).

2025 Teacher Loan Forgiveness in Texas

Texas continues to experience high demand for certified teachers—especially in STEM and bilingual education. The 2025 Teacher Loan Forgiveness (TLF) program provides up to $17,500 in federal Direct or Stafford loan forgiveness for qualifying teachers in low-income Texas schools.

• Eligibility: Five consecutive years of full-time teaching at an eligible Title I school (see TEA’s list).
• Forgiveness Amount: $17,500 (math, science, special ed teachers); $5,000 for other subject areas.
• Application Tip: You can use both TLF and PSLF programs, but not for the same service period.

Case Study: Jose in El Paso owed $27,000 in loans. He received $17,500 forgiveness after five years as a math teacher in a qualifying school—and then continued working toward PSLF for the remaining balance.

Texas Student Loan Relief & State Assistance

Beyond federal programs, Texas offers additional support for student loan borrowers:

• Texas State Repayment Assistance Programs:
  • Lawyer Loan Repayment Assistance for public interest attorneys
  • Texas Physician Education Loan Repayment for primary care doctors in shortage areas
  • CAL Program enhancements: Flexible refinance options for Texans with high-interest private loans
• Forgivable Education Loans for Service: For health care professionals and other high-need fields (administered by THECB)

Always check eligibility and annual funding limits at hhloans.com.

Borrower FAQ: 2025 Forgiveness & Repayment Questions

• Can I combine state and federal forgiveness? Yes—many Texans stack state repayment assistance with PSLF or IDR forgiveness.
• Will forgiveness be taxed in Texas? Federal loan forgiveness is not taxable. Texas does not levy state income tax.
• What happens if I miss an annual recertification? On the SAVE plan, your payment may revert to the Standard Plan until you submit new documentation—but you won’t lose prior qualifying months for forgiveness.
• Are private loans eligible for these programs? No, but some Texas lenders now offer state-level refinance/relief options.

Take Action: Navigating Student Debt in Texas, 2025

1. Run a free loan check-up at studentaid.gov to confirm what you owe and your current plan.
2. Consult the Texas Tuition Promise site to explore new borrower relief and emergency forbearance resources.
3. If you work in public service, immediately certify employment for PSLF eligibility.
4. Contact a non-profit student loan counselor or the Texas Higher Education Coordinating Board for personalized guidance.

Helpful Resources for Texas Borrowers

• Federal Student Aid
• Texas Higher Education Coordinating Board
• Texas Tuition Promise Fund
• PSLF Help Tool

Remember: 2025 brings better options, stronger protections, and greater support for Texas borrowers. Review your options today to maximize forgiveness and minimize debt!

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