Over 1 million borrowers are stuck in a backlog for income-driven repayment plan enrollment.
The government shutdown has halted progress on clearing the IDR backlog, exacerbating delays.
Some borrowers have received emails indicating that their loans will be discharged in the coming months under the Income-Based Repayment (IBR) plan.
A key tax break that makes loan forgiveness tax-free is set to expire on Jan 1, 2026, adding pressure for timely processing.
The delays in processing IDR plans are causing significant disruption to borrowers' lives, as they struggle to access affordable payment options. The backlog is partly attributed to issues predating the shutdown, but the current government impasse has brought progress to a standstill. Many borrowers are trying to switch out of the Biden administration-era SAVE plan after a court challenge. Compounding the problem, interest continues to accrue for some borrowers stuck in forbearance. The Department of Education has begun sending emails to borrowers who qualify for forgiveness under IBR plans, signaling some progress, though the shutdown may delay final discharge. A class action lawsuit has requested the Department of Education resume loan forgiveness for all borrowers in income-driven repayment plans.
How to Prepare:
Maintain thorough records of all applications and communications with loan servicers.
Set aside funds to cover payments once the Education Department switches you into another IDR plan.
Monitor accounts for accruing interest and be prepared to address any discrepancies once processing resumes.
Who This Affects Most:
Borrowers with low incomes who rely on IDR plans to manage their payments.
Public servants and non-profit workers pursuing Public Service Loan Forgiveness (PSLF).
Borrowers who were in the SAVE forbearance and are now seeing interest accrue on their debt.
Q: What should borrowers in the IDR backlog do?
Save the money they would have used for payments and maintain thorough records of their applications.
Q: Will the government shutdown affect loan forgiveness?
Yes, non-essential functions at the Department of Education are suspended during the shutdown, likely delaying loan discharges.
Delays in student loan repayment plan processing continue due to a backlog and the government shutdown.
Some borrowers are receiving notice of upcoming loan forgiveness under IBR plans.
Borrowers should maintain diligent records and prepare for potential payment resumption.
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