The education department resumed applications for all income-driven repayment (IDR) plans on March 26 after a month of suspension that prevented federal student loan borrowers from registering with IDR plans or recertifying their income.
The servicer would resume processing the IDR application by May 10, and the Education Bureau under Secretary James Bergeron wrote in a court filing on April 8. In the meantime, borrowers who submit their IDR applications must be automatically placed in the processing tolerance for up to 60 days. Call the servicer to confirm that you have received your application and be generous.
»More: What is administrative tolerance for student loans?
The department initially repealed the IDR application after a court case in a lawsuit against SAVE, a new IDR plan introduced by the Biden administration.
The reopening of applications comes a week after the American Federation of Teachers (AFT) filed a lawsuit against the education department. This alleges that the department has violated federal law by blocking borrowers’ access to IDR plans and public service loan forgiveness (PSLF).
Still, the situation remains fluid, creating a situation that is confusing for borrowers.
“A lot of people are slowing down the very realistic choices of life, about this confusion and the uncertainty about which (repayment) is available, whether these plans can be reached, and whether they will obtain eligible loan cancellations.”
As of April 16th, here are some things I know and don’t know about the IDR plan:
What we know about income-driven repayments
IDR application is open but looks different
Save is not available in the updated IDR application. Plus, Scott Buchanan, executive director of the Student Loan Service Alliance, said there was no longer an option to check the box that asks the servicer to place you in your repayment plan with monthly payments.
As a result, you need to do your own research into which plans are best for you. Use the Education Department Loan Simulator to estimate monthly bills and the total amount you will pay off based on different plans. Please note that Save is still visible in the simulator. However, you will no longer be able to register.
Income-based repayments are the safest IDR plan
The save is likely to occur, says Robert Kelchun, a professor of higher education at the University of Tennessee in Knoxville, who is studying income-driven repayments. However, there are three other IDR plans that borrowers can currently apply for.
If you need an income-driven repayment plan, experts say an IBR plan is the safest option. Unlike the other three IDR plans, the IBR was established by Congress, so Congress must vote to change or remove it.
You can also choose a repayment plan that does not link payments to your income. A standard repayment plan that divides total debt into 120 installments over a decade is the best repayment plan for borrowers who want to be completely certain about future payments, says Kelchun. But for borrowers with large amounts of debt compared to their income, he says, the standard plan could potentially make monthly payments too high.
“Borrowers need to stay deep inside their hearts. They may have to always return to standard payments,” Kelchun says. “I would have said before January that it wouldn’t happen, but considering everything that’s happened in the last few months, who knows? I think borrowers should at least be aware of that worst-case scenario for them.”
Hold forgiveness credits when switching to IBR plans
According to the Education Department website, if you decide to switch from another IDR plan to an IBR plan, you will retain the forgiveness credits you earned under your previous IDR plan.
The department “can handle loan exemptions for income-based repayment (IBR) plans individually enacted by the Congress.
The Education Department has not explicitly stated whether the IDR credit will be transferred to Paye or ICR.
Please note that as a result of the SAVE lawsuit, forgiveness under Save, Paye and ICR is currently pending. The servicer is only permitted to process IBR forgiveness at this time.
Some IDR recertification deadlines have been extended until February 2026
While the IDR application was down, borrowers who were already registered were blocked from recertifying their income as the process required the same form. This eliminates the risk that some borrowers will not be able to meet the recertification deadline and will be kicked out of their IDR plans.
If the original deadline was after March 18th, the deadline for recertifying your IDR may have moved to February 2026. Some borrowers, which will have a recertification deadline by March 18th, have also been extended. For more information, see the Q&A section of the Education Department web page.
If you have any questions, please do not notice a new recertification date or payment issues in your servicer account. Call the servicer to see what’s going on.
Things we don’t know about income-driven repayments
If the IDR application is processed accurately
The servicer will begin processing the IDR application by May 10 under current guidance, but the timeline is subject to change.
“We basically have to update our systems and go back to what they are before the save restrictions,” Buchanan says. “We can’t say exactly that processing will resume until we know if it’s going to be updated to the system, but the goal is to move it as quickly as possible.”
Once processing resumes, Buchanan says the submitted applications are not necessarily processed in the order in which they were received. Perhaps the servicers will process them in order of complexity, he says, first processing a simple application, followed by those that require manual communication with the borrower.
Applications with qualification requirements (for example, that require proving the financial difficulties required for an IBR plan) can take time to process, Buchanan says.
What happens to existing borrowers?
As of December 31, 8 million borrowers are still registered with SAVE, according to data from the Education Division. These borrowers have been indefinitely interest-free tolerance since July. They have not borrowed payments and have not built interest on their debts, but they have also not earned credit for PSLF or IDR forgiveness.
By saving chopping blocks, it is unclear what options these 8 million borrowers will have in the future.
What else should you do now?
Beware of student loan fraud
Student loan fraudsters prey on borrowers in times of confusion and uncertainty. The scam may be someone who offers a phone call and offer to guide you to another IDR plan in exchange for a $300 fee.
It doesn’t cost you money to change your repayment plan. Generally, the servicer will only call you if there is a problem with your account, Buchanan says. Information about the repayment plan will be provided via email, he says.
“So if someone calls and says, ‘Hey, you know, I can help you get into the right plan,’ then that’s probably not us,” Buchanan says. “We will call if you go to delinquent and have issues with your account, and we will certainly email you information about your repayment plan, but that will only come from your actual servicer or (education) department.”
Keep a meticulous student loan record
Layoffs and general confusion in the large education sector of the student loan system require you to keep your own records and defend yourself. Download or screenshot this information in case of inconsistencies or issues.
Payment counter at dusttainid.gov. Monthly bills and payment records. Progress towards forgiveness of PSLF or IDR. The promissory note of the master you signed when you took out the loan. Emails or letters from the education department or servicer. Notes or recordings from a call with the servicer.
Ask for help if necessary
Start by calling the student loan servicer with your IDR questions. If you need more student loan help, contact your university’s financial aid office (even if you left school years ago) and review the nonprofit and state-based student loan ombudsman offices.
“Unfortunately, I don’t think we can rely on the Ombuds Office (federal student aid in the education sector) that was put all our efforts by this administration and the Consumer Financial Protection Agency,” Yu said.
Additionally, if the student loan issue remains unresolved, Yu suggests contacting the constituent service office of council representatives. Learn how to contact elected officials on USA.gov.
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Eliza Haverstock writes for Nald Wallet. Email: ehaversstock@nerdwallet.com. Twitter: @elizahaversstock.
The article’s major student loan repayment application has resumed, and the process of resuming next month was originally published on Nerdwallet.
