(MENAFN- GlobeNewsWire - Nasdaq) Glendale, CA, Oct. 03, 2025 (GLOBE NEWSWIRE) -- When Congress failed to pass a funding agreement before the October 1 deadline, the federal government entered a partial shutdown that immediately shut down 87% of the U.S. Department of Education's workforce . With nearly 1,485 of 1,700 Education Department employees furloughed, critical services like income-driven repayment (IDR) applications, Public Service Loan Forgiveness (PSLF) reviews, and borrower support hotlines have ground to a halt.

Yet payments on federal student loans remain due, leaving more than 40 million borrowers in limbo as they struggle to navigate rapidly resumed repayment obligations without full access to federal resources. To help bridge this gap, regardless of credit score or borrowing history, RadCred has launched its AI loan matching technology, a platform that connects borrowers of all backgrounds with personalized loan and refinancing options in minutes.

Government Shutdown Impact on Student Loan Services

The shutdown's impact on student loan servicing began immediately. On October 1, all new IDR applications and PSLF certifications were suspended. Borrowers in Kansas, New York, California, and across the country who rely on these programs now face an indefinite delay in critical payment adjustments and forgiveness processing.

Despite limited staffing, the Department of Education continues to collect payments and process FAFSA renewals under contingency guidelines, ensuring new financial aid disbursements proceed for current students. However, nearly 74,510 borrowers awaiting PSLF decisions and over one million IDR applicants find their cases in backlogged queues, unable to access customer representatives or secure updated repayment plans.

Why Student Loan Borrowers Need Alternative Solutions Now

For recent graduates and young professionals, the sudden return to payment obligations has intensified financial strain. After years of paused accrual under pandemic and legislative relief measures, borrowers now confront compounding interest rates, currently averaging 4.99% on subsidized loans and up to 7.54% on unsubsidized federal loans.

Private student loans, which carry rates as high as 12% to 14%, add further complexity to the situation. Traditional lenders often lack the necessary infrastructure to handle the intricacies of federal loans, such as IDR adjustments or PSLF eligibility, creating a gap that borrowers cannot afford to wait out. With rent, utilities, and living expenses unpaused, millions urgently need flexible financial solutions beyond the federal system.

RadCred's AI-Powered Loan Matching System for Student Loan Challenges

To address this sudden need, RadCred today introduced its AI-Powered loan matcher, a loan-matching tool designed to streamline student debt solutions. RadCred's platform analyzes over 100 data points, including employment history, pay stub patterns, existing debt levels, and federal loan balances, to connect borrowers with tailored private refinancing and consolidation offers. By performing soft credit checks, the AI-based loan technology preserves FICO scores during periods of government uncertainty, delivering approval decisions within minutes compared to the months-long federal backlog.

Borrowers receive a clear comparison of personalized loan options, including fixed-rate refinance loans with terms from 24 to 84 months and competitive APRs as low as 5.99% for well-qualified applicants. For borrowers hesitant to give up federal protections, RadCred's system highlights hybrid solutions that consolidate private loans separately while guiding users through deferred repayment options for federal balances once services resume. The platform's transparent interface displays all fees and rates upfront, making it easier for borrowers to evaluate refinancing versus forbearance or consolidation.

Key Benefits for Borrowers Facing Student Loan Resumption

• Rapid Matching in Minutes- AI algorithm identifies eligible loan offers faster than federal processors.
  
• Competitive Private Refinance Rates- Access rates below industry average APRs for borrowers with improved credit profiles.
  
• Hybrid Consolidation Pathways- Combine private debt while preserving federal loan protections.
  
• Credit Repair Partnerships- Connect with credit counselors to strengthen FICO scores during repayment.
  
• Transparent Terms- View full breakdown of APRs, origination fees, and repayment schedules upfront.

“Borrowers shouldn't have to wait on furloughed federal staff to manage their financial futures,” said Jamie Carter, RadCred Accounts Executive.“Our new AI loan matching empowers student loan borrowers with immediate options, so they can stay current, avoid late fees, and maintain control of their credit scores.”

How to Use RadCred's AI Loan Matcher?

First, visit RadCred and answer a short questionnaire on your federal and private loan balances, income, and expenses.

Next, the AI-powered engine runs a soft credit soft pull and analyzes eligibility in under three minutes. Then you'll see a curated list of refinance and consolidation offers, complete with APRs and monthly payment estimates.

Finally, select the lender that best meets your needs and complete the application. Funds will be disbursed directly to your student loan servicer or bank account within 1-3 business days. The entire process works seamlessly on both mobile and desktop.

Building Long-Term Student Debt Resilience

While refinancing and consolidation can simplify monthly student loan payments, students who plan to borrow should also adopt healthy financial habits. Borrowers are advised to establish a $1,000 emergency fund before refinancing, automate payments to avoid missed deadlines, and follow the 50/30/20 budgeting rule, allocating 20% of income to debt repayment.

Monitoring credit reports regularly helps identify errors or signs of identity theft. For borrowers concerned about federal benefits, RadCred's platform maintains educational resources on when to maintain federal loans for forgiveness eligibility versus when to refinance for savings.

Conclusion

As federal student loan payments resume amid government shutdown service disruptions, borrowers need practical alternatives to manage mounting balances and resume on-time payments . RadCred's AI loan matching offers a fast and transparent way to explore private consolidation and refinancing loan options tailored to individual financial profiles.

Simplifying multiple loans into a single payment and offering competitive fixed rates, RadCred empowers Kansas graduates and all U.S. borrowers to regain control over their finances. With government servicers at reduced capacity, student debt solutions like RadCred offer an immediate lifeline, bridging the gap until federal services are fully restored.

About RadCred

RadCred is an AI loan matching platform connecting borrowers with licensed lenders offering personal loans, refinance options, and emergency funding solutions across all 50 states. Built on transparency and innovation, RadCred empowers borrowers with instant prequalification, soft credit inquiry protections, and same-day funding possibilities. Thousands of Americans trust RadCred's responsible lending practices to find tailored financing when traditional banking falls short.

Disclaimer

functions as a loan-matching platform rather than a direct lender. Loan approval, APRs, repayment terms, and funding speed vary by lender policies, applicant financial profiles, and state law requirements. Prequalification utilizes soft credit inquiries to preserve FICO scores; final lender approval may involve hard credit pulls. Same-day funding depends on lender capabilities and bank processing schedules. RadCred does not guarantee loan approval or outcomes. Borrowers should review all APRs, fees, repayment schedules, and total costs before accepting any loan offer to ensure responsible borrowing aligned with their financial situation.

CONTACT: RadCred Press Office Phone: (818) 555-1234 Email: ... Website:

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