IDR applications and income recertifications are back open and being processed again after a hiatus and ensuing backlog. Following a court order related to the SAVE repayment plan earlier this year, the Department of Education froze all income-driven repayment (IDR) plan applications. On May 10th, applications were once again open in response to a lawsuit from the American Federation of Teachers that alleged the Department was preventing borrowers from applying to potentially lower their monthly payments. Further, borrowers were unable to recertify their incomes for their IDR plans, which they are required to do annually or risk being ejected from their plan. Although the resumption has been slow-going, borrowers can now both change IDR plans and recertify their incomes on studentaid.gov, although recertification for many borrowers has been pushed out until 2026.
Although IDR applications are open again, a key tenet of the plans remains frozen for many borrowers: IDR forgiveness. This program, which was created when the first IDR plan was rolled out in the 1990s, forgives a borrower’s remaining balance after 20 or 25 years of repayment (depending on the type of loans they hold). The judicial order that initially led to the freeze on IDR plans targets everything contained in the Biden Administration’s last rule on student loans, issued in July of 2023. The current Department of Education, however, seems to be taking things further, having frozen processing of IDR forgiveness even though it predates the 2023 rule. Borrowers on IBR (the IDR plan with the highest monthly payment) are still advancing toward IDR Forgiveness because IBR was created by Congress. Borrowers on the IDR and PAYE plans (which were created by the Department of Education in 1993 and 2012, respectively) are not currently advancing toward forgiveness.
Although borrowers pursuing Public Service Loan Forgiveness (PSLF) generally use IDR plans, they are unaffected by the pause on IDR Forgiveness. As long as they are enrolled in one of the remaining, accepted IDR plans (IBR, ICR, and PAYE) and making their regular payments, they should be progressing towards forgiveness as usual.
If you have questions about IDR plans, changing your plan, IDR forgiveness, or any other student loan issues, give us a call. We’ll keep you up to date on the latest regulations and make sure you’re on the right path through your student loan journey.
