Student-loan borrowers can once again apply for affordable repayment plans online — but they won’t be processed just yet.
After a month without online access to applications for income-driven repayment plans, the Department of Education announced on Wednesday that the applications are once again available for borrowers to access.
The available plans include the income-based repayment plan, the pay-as-you-earn (PAYE) plan, and the income-contingent repayment plan, which borrowers can access using the online income-driven repayment application. The online loan consolidation application is also available again.
Guidance posted on Federal Student Aid’s website said that while the application is now available, “loan servicers are still updating their systems in accordance with the court’s actions. Servicers will begin processing applications in the near future.”
One key income-driven repayment plan — the SAVE plan — is still unavailable. Created by former President Joe Biden, the SAVE plan was intended to give borrowers cheaper monthly payments with a shorter timeline for loan forgiveness. It was aimed at remedying challenges with the older repayment plans that Trump just reopened, including ballooning interest that often led to borrowers owing vastly more than they originally took out. The plan has been blocked since July, and it’s still in court pending a final legal decision.
The Department of Education said on Wednesday that the other repayment applications were removed in an effort to comply with the federal court’s ruling on SAVE, which ED said required them to take down the forms and revise them.
“Our team was able to relaunch this application within weeks, ensuring borrowers have access and the ability to access all legal repayment plans,” Acting Under Secretary James Bergeron said in a statement.
While the latest ruling from the 8th Circuit on the SAVE plan suggested that debt relief under some income-driven repayment plans might be improper, the court did not explicitly direct the Education Department to block borrowers’ access to those plans.
On March 19, the American Federation of Teachers — represented by the advocacy group Student Borrower Protection Center — filed a lawsuit against the Department of Education over its removal of online access to income-driven repayment applications. The lawsuit argued that the application removal impeded borrowers’ progress in the Public Service Loan Forgiveness program, which forgives student debt for government and nonprofit workers, including teachers.
The Student Borrower Protection Center said in a statement on Tuesday night that, during the first hearing for the case, Department of Justice lawyers stated their intent to reopen the applications on Wednesday.
It’s unclear when servicers will begin processing new income-driven repayment plan applications. Persis Yu, deputy executive director and managing counsel at the Student Borrower Protection Center, said in a statement: “Every day these applications go unprocessed deprives borrowers of critical time toward PSLF relief and financial stability.”
