The Education Department has reopened the application for all income-driven repayment (IDR) plans on Mar. 26, following a month-long suspension that prevented federal student loan borrowers from enrolling in an IDR plan or recertifying their income. Although you can now submit an IDR application, servicers are not yet allowed to process them.
The reopening of the application came after the American Federation of Teachers (AFT) filed a lawsuit against the Education Department, accusing them of violating federal law by blocking borrowers’ access to IDR plans and Public Service Loan Forgiveness (PSLF).
Despite the reopening, the situation remains uncertain and confusing for borrowers. Persis Yu, deputy executive director and managing counsel at the Student Borrower Protection Center, representing the AFT in the lawsuit, expressed concerns about the chaos and uncertainty surrounding repayment plans.
As of Apr. 1, here’s what we know – and don’t know – about IDR plans:
1. The IDR application is open, but has changed. The option to request the lowest monthly payment plan is no longer available, and borrowers must now research and choose the plan that suits them best.
2. Income-Based Repayment (IBR) is considered the safest IDR plan, as it was established by Congress and would require congressional action to change or remove it.
3. Switching to the IBR plan allows borrowers to retain any forgiveness credit earned under previous IDR plans.
4. Some IDR recertification deadlines have been extended to February 2026, providing relief to borrowers who were unable to recertify during the application suspension.
For more information and details, visit the Education Department’s website.
If you have any inquiries, do not see an updated recertification date in your servicer account, or notice any discrepancies in your payment amounts, it is advisable to contact your servicer to clarify the situation.
What remains uncertain about income-driven repayment
When will the processing of IDR applications recommence
Servicers are expected to start processing IDR applications in the near future, as per the Education Department’s website. However, no specific date was provided in response to BW’s inquiry.
Buchanan anticipates that processing will resume in early April, although this timeline is not yet finalized.
“We are currently in the process of updating the systems to revert to their pre-SAVE regulation state,” explains Buchanan. “The exact duration of these system updates is unknown, so we cannot provide a precise timeline for when processing will restart. However, the objective is to resume processing as swiftly as possible.”
Once processing resumes, applications will not necessarily be processed in the order they were submitted. According to Buchanan, applications will likely be processed based on complexity, with straightforward cases being handled first, followed by those requiring manual intervention or communication with the borrower.
Applications with eligibility criteria, such as demonstrating financial hardship for the IBR plan, may take longer to process, adds Buchanan.
The status of existing SAVE borrowers
As of December 31, there are still eight million borrowers enrolled in SAVE, according to data from the Education Department. These borrowers have been in an indefinite, interest-free forbearance since July. While they are not required to make payments and no interest is accruing on their debt, they are also not making progress towards PSLF or IDR forgiveness.
With SAVE being phased out, the future options for these eight million borrowers remain uncertain.
Other important actions to take immediately
Beware of student loan scams
During times of confusion and uncertainty, scammers often target student loan borrowers. Be cautious of scams such as individuals offering to enroll you in a different IDR plan for a fee of $300.
Changing your repayment plan should not come at a cost. According to Buchanan, servicers typically only contact you if there is an issue with your account. Information regarding repayment plans is usually communicated via email.
Buchanan emphasizes, “If someone calls claiming they can assist you in selecting the right plan, it is likely a scam. We will reach out if there are account problems or delinquency, and information about repayment plans will be provided by your servicer or the Education Department.”
Maintain detailed student loan documentation
Given the recent layoffs at the Education Department and the current turmoil in the student loan system, it is crucial to keep thorough records and be your own advocate. Save or screenshot essential information to address any discrepancies or concerns that may arise:
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Monthly billing statements and payment records.
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Progress towards PSLF or IDR forgiveness.
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The master promissory note signed during loan initiation.
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Any correspondence from the Education Department or your servicer.
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Notes or recordings from discussions with your servicer.
Seek assistance if necessary
Yu expresses concerns about relying on the Federal Student Aid ombuds office and the Consumer Financial Protection Bureau due to recent cutbacks. If you encounter unresolved student loan issues, Yu recommends contacting the constituent services offices of your congressional representatives. Visit
USA.gov
to find the contact information for your elected officials.
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Rewritten sentence: Basking lazily in the sun, the cat savored the warmth.