Latest news with #incomeDrivenRepayment
Forbes
2 days ago
- Business
- Forbes
Student Loan Forgiveness Tracker Will Return For Millions Of Borrowers, Says Top Official
A critical tool that allowed millions of Americans to track their student loan forgiveness progress will soon be restored after the Trump administration's abrupt removal earlier this year. The announcement was made by Senator Elizabeth Warren (D-Mass) last week, who said that U.S. Secretary of Education Linda McMahon confirmed the details to her during a meeting. The move would be welcome news for millions of borrowers who have been left in the dark about where they stand on student loan forgiveness under income-driven repayment plans. And it comes as uncertainty continues to grip much of the federal student loan repayment system following efforts by Republicans lawmakers in Congress and the Department of Education to potentially make substantial changes to affordable repayment programs and student loan forgiveness options. Here are the details. Until this year, millions of borrowers enrolled in income-driven repayment (or IDR) plans had no easy way to determine where they stood on their repayment term. IDR plans such as Income-Based Repayment, Income-Contingent Repayment, and Pay As You Earn offer borrowers affordable monthly payments tied to their income and family size, with the possibility of student loan forgiveness for any remaining balance after 2o or 25 years in repayment. But unlike other programs like Public Service Loan Forgiveness, borrowers enrolled in IDR plans could not ascertain how close they were to the student loan forgiveness threshold. In January, the Biden administration finally released a long-awaited IDR payment tracker for borrowers in IDR plans, displayed via their accounts. The tracker provided a 'counter' graphic detailing how many months and years a borrower had remaining until qualifying for IDR student loan forgiveness, as well as a more detailed month-by-month breakdown showing which months were counting and which were not (similar to the PSLF tracker, also displayed through This helped borrowers determine how much more time they had left in repayment, and when to expect that they would receive loan forgiveness – critical information for budgeting and tax planning, particularly since IDR student loan forgiveness can be a taxable event. But in April, the Department of Education abruptly removed the IDR student loan forgiveness tracker. The department provided little in the way of explanation, but suggested this was done so that the data underlying the tracker could be improved. Some borrowers did report that there were problems with the IDR tracker, resulting in some trackers displaying incorrect or incomplete information on student loan forgiveness progress, or didn't appear at all. Other observers noted that due to legal challenges, student loan forgiveness has been blocked under the ICR, PAYE, and SAVE plans, but this was not reflected in the IDR tracker. Last week, Senator Warren reported back on a meeting she held with Education Secretary Linda McMahon. Warren indicated that McMahon confirmed that the IDR tracker would be returning soon. 'Secretary McMahon stated that she intends to soon restore the income-driven repayment (IDR) payment count tracker to allowing borrowers to track their progress towards receiving debt relief, after taking down the tracker earlier in the Trump administration,' said Senator Warren in a statement last week. 'My job as a U.S. Senator is to conduct oversight and hold officials' feet to the fire when they are actively harming the American people," she said. 'I was able to secure important commitments from Education Secretary McMahon, which will make a real difference for people with student loans.' In addition to assurances that the IDR tracker would return, Senator Warren also outlined additional commitments from Secretary McMahon, including: 'At a time when President Trump and Republicans in Congress are trying to make it more expensive for students from working-class families to get ahead, I will not stop fighting to ensure that every student has access to affordable, quality education in America,' said Warren. While the assurance that the IDR student loan forgiveness tracker will return soon is welcome news for many borrowers, the announcement comes amid growing doubts about the future of several IDR plans. The SAVE plan, which has been blocked by a federal appeals court since last summer, appears increasingly likely to not return as a repayment option. SAVE was created by the Biden administration to be the most affordable federal student loan repayment plan. The Department of Education has also suspended student loan forgiveness under the ICR and PAYE plans, which were created under the same legal authority as the SAVE plan, following the appeals court's most recent ruling in February. 'Forgiveness as a feature of the SAVE, PAYE, and ICR Plans is currently paused, because those plans were not created by Congress,' said the department in an update in April. 'ED can and will still process loan forgiveness for the IBR Plan, which was separately enacted by Congress. Payments on PAYE, SAVE, and ICR are counted toward IBR Plan forgiveness if the borrower enrolls in IBR.' Meanwhile, Republican lawmakers in Congress have taken significant steps to enact legislative changes that would fundamentally change the IDR system. Under separate bills in the House and the Senate, most current IDR options including SAVE, ICR, and PAYE would be repealed if the legislation is enacted. IBR would be preserved for current federal student loan borrowers, although this plan may be significantly more expensive than the repealed programs, resulting in higher monthly payments for many Americans. The bill would also create a new IDR option called the Repayment Assistance Plan, or RAP. But RAP would increase the monthly payments for the lowest-income borrowers, and would extend the repayment term to 30 years (rather than 20 or 25) before borrowers could qualify for student loan forgiveness. The House passed its version of the bill last month, while a companion bill introduced in the Senate last week is still pending.
CNET
11-06-2025
- Business
- CNET
If You're a Student Loan Borrower Enrolled in Save, Make This Move Now While Your Payments Remain Paused
If you're enrolled in SAVE, make this move while your payments remain on hold. Pla2na/Getty Images/CNET There's been a lot of student loan noise over the past year, but little clarity for borrowers enrolled in the Saving on a Valuable Education repayment plan. We've witnessed several updates to student loan programs over the past year, from proposed changes to Public Service Loan Forgiveness eligibility to the ramping up of collections efforts on defaulted student loan accounts to a new Republican-fronted bill seeking to change existing income-driven repayment plan options. But the official rejection of SAVE may have the biggest impact for the 8 million borrowers who qualified for lower monthly payments. Now that we know SAVE is officially out, what's next? Should you switch to another income-driven repayment plan? Or wait it out? I talked to experts to find out when payments are expected to restart and what you should do during this downtime. Read more: You May Need to Resubmit Your Student Loan IDR Plan Application. Here's Why When will payments restart for SAVE student loan borrowers? It's not clear when payments will start again for borrowers on the SAVE plan, but it's looking like the end of this year would be the earliest timeframe. The Department of Education's website says SAVE borrowers will stay in a general forbearance until at least the fall. It also directed loan servicers to adjust the income recertification deadline to no earlier than Feb. 1, 2026. Robert Farrington, student loan expert and founder of The College Investor, expects the general forbearance to last even longer. "Borrowers will likely see the SAVE forbearance end in mid-to-late 2026," says Farrington. "Many borrowers are already reporting the end date of their forbearance moving to September 2026." Currently, loan payments for any borrower in SAVE remain on hold in a general forbearance and your balance isn't accruing interest. If you're enrolled in a loan forgiveness program like PSLF, each paused month will not count towards your forgiveness during the pause. While you can choose to switch to an alternative repayment plan, most experts suggest sticking with SAVE, and doing this one thing ahead of payments resuming. While your payments are paused, you won't have to worry about your account being moved to collections. Although borrowers with defaulted loans are once again subject to collections, including wage garnishment, those enrolled in the SAVE plan don't have to worry about those consequences for now. Should PSLF borrowers in SAVE switch to another payment plan? If you're a teacher, nurse or other public servant pursuing PSLF, you may be worried that the payment pause is not counting toward your 120-payment requirement. That leaves you with three options. First, you could switch from SAVE to another income-driven repayment plan (ICR, IBR or PAYE). That way, your payments will count toward PSLF's 120-payment requirement. Alternatively, if you would have hit 120 months of on-time payments if not for the pause, you can apply for the PSLF Buyback program to get credit for your time in forbearance. "This program [allows borrowers] to make a lump-sum payment for any months spent in administrative forbearance under SAVE, ensuring those months count towards PSLF," explains Megan Walter, NASFAA senior policy analyst. The downside of these first two options is that borrowers have been reporting processing delays. So don't expect a fast response. Lastly, if you've recently enrolled in PSLF or are not close to receiving forgiveness, you might prefer to wait until you're moved into a new payment plan. Yes, your months in forbearance won't count toward your 120-payment goal, but this could give you time to start saving for a potentially higher student loan payment. Whether you decide to change plans now or wait, make sure your decisions align with your financial goals. With SAVE no longer an option, it's important to understand all your avenues for paying back your student loans. Two things SAVE borrowers can do right now That doesn't mean you should sit back and do nothing, though. Take this time to prepare for the likelihood that your payments will increase in the future by reviewing other payment plans and putting money away so you're prepared when payments resume. You can use the Federal Student Aid's Loan Simulator tool to help calculate how much your monthly payment will be under different payment plans. If you have the wiggle room in your budget, you can start paying yourself each month the same amount you'd put toward your student loan payments. Pay this money directly into a high-yield savings account so you can earn a little interest on your savings. Then, when payments resume, you'll have a cushion ready to go.
CNET
11-06-2025
- Business
- CNET
Did You Apply for a Student Loan IDR in the Past Year? You May Need to Reapply
You may need to reapply for an income-driven repayment plan if your student loan servicer is Mohela. Getty Images/CNET An income-driven repayment plan can offer you a more affordable student loan payment. But if you applied for an IDR plan before April 27, 2025, and your servicer is Mohela, you may need to resubmit an application. Mohela, one of the Department of Education's contracted loan servicers, posted on its website that IDR applications received prior to April 27 did not include income information and would be automatically canceled. If you're already on an IDR plan, such as Saving on a Valuable Education, and you applied to change plans before this date, you'll also likely have to resubmit your application. You don't have to reapply for an IDR plan if you applied after April 27. Don't panic if you haven't heard back about your new payment plan yet. Your loans could be placed into a temporary forbearance while your application is processed. Switching to an IDR became more difficult last year, after the courts were weighing the legality of SAVE plans. During this time, the Department of Education paused IDR processing and even removed the online applications from the website. IDR processing resumed in November of 2024. This year, IDR plans were paused again in March and reopened in April. Here's everything you need to know about how to find out if Mohela is your loan servicer, the steps you'll need to take you have to resubmit your IDR application and more options that borrowers enrolled in SAVE plans should consider. How to find out if Mohela is your servicer If you're enrolled in a SAVE plan, chances are you may not have logged in to your student loan account since before the pandemic. Between all the payment pauses and servicer changes over the past five years, you might not know who your current servicer is. You can find out by logging in to your Federal Student Aid account at Once you're logged into your account, you'll be able to view all your loans and balance information, as well as your repayment status and your servicer information. How to resubmit an IDR plan application You can apply for an income-driven repayment plan online at the financial aid office of the Department of Education. Here are the steps you'll need to follow. Go to the IDR plan request page at Select "Apply for an Income-Driven Repayment Plan" or "Recertify or Change Your Income-Driven Repayment Plan." Then log into your Federal Student Aid account. Confirm your contact information, like address, email and phone number. Select "continue" to proceed. You'll then see which loans are eligible for you to reapply for an IDR plan. Select "continue" to proceed. The next few pages will ask you to confirm personal information, like your marital status and family size. Confirm any dependents and your income. You'll need to provide proof of income, like a W-2, paystub or bank statement. Review the different IDR plans and select one. See different options and payment scenarios with the FSA loan simulator. Review all your information and confirm and certify your application. Then select "continue" to submit your application. Should SAVE borrowers switch plans? Though the SAVE student loan repayment program has been shuttered, you don't have to move to a new IDR plan at this time. Your payments remain paused during the administrative forbearance. Experts recommend using this downtime to explore other IDR options, like the income-based repayment plan, income-contingent repayment plan or the Pay as You Earn plan. If you're working toward debt relief through the Public Service Loan Forgiveness program or a similar program, then it may make sense to change IDR plans so you can hit your 120 payment goal faster. If you're enrolled in the PSLF and would have reached the payment total if not for the current payment pause, you can apply for the PSLF buyback program instead of switching IDRs. This program may allow you to make the remaining payments required to reach the debt forgiveness status on your federal loans.
Forbes
10-06-2025
- Business
- Forbes
This Student Loan Servicer Says You May Need To Reapply For Your IDR Plan — Key Details
The income-driven repayment application system for federal student loans remains a mess, as borrowers struggle to navigate programs that have been plagued by legal challenges and processing pauses. Now, one major student loan servicer has thrown an additional wrench into the system by announcing that some borrowers who have already submitted an income-driven repayment application may need to reapply. Income-driven repayment (or IDR) plans offer borrowers affordable monthly student loan payments based on their income and family size. IDR is a category of repayment plans that encompasses several specific programs including Income-Contingent Repayment, Income-Based Repayment, Pay As You Earn, and Saving on a Valuable Education. These plans are often referred to by their acronyms – ICR, IBR, PAYE, and SAVE, respectively. Payments under all of these plans are typically recalculated every 12 months, and the payments can change over time as a borrower's income changes. IDR plans historically have also provided pathways to student loan forgiveness. Typically, borrowers can qualify for loan forgiveness after 20 or 25 years in repayment. That timeline can be reduced to as little as 10 years for borrowers working in nonprofit or government jobs, as enrolling in IDR plans is usually required for borrowers pursuing Public Service Loan Forgiveness, or PSLF. But the IDR application system has been in turmoil for most of this year. And now, some borrowers won't even realize that they may need to submit a new IDR application, which MOHELA – one of several major student loan servicers contracted with the Department of Education – announced certain borrowers will need to do. Here's what you should know. The problems with the IDR system began with a lawsuit filed last year against the Biden administration over the SAVE plan. The challenge brought by a coalition of GOP-led states argued that the SAVE plan was an abuse of executive branch authority and exceeded what Congress had authorized when it passed legislation creating income-driven plans for federal student loans more than 30 years ago. Last summer, a federal appeals court blocked the SAVE program, throwing the entire IDR system into disarray and forcing more than eight million borrowers who had enrolled in SAVE into a forbearance. Then, in February of this year, the court expanded that earlier injunction, injecting even more chaos and uncertainty into the federal student loan repayment system. In response, the Trump administration temporarily suspended the entire IDR application system, arguing that it had no choice due to the breadth of the court's order. 'The latest court actions significantly affect preexisting ED rules on its loan programs and IDR plans,' said the Department of Education in web guidance provided to borrowers. 'The most recent court actions require a pause to everything' The department subsequently restored the IDR application and resumed processing, but only after the American Federation of Teachers filed a lawsuit in March, arguing that the systemwide IDR application and processing suspension was unlawful and had illegally prevented borrowers from accessing affordable payments and student loan forgiveness programs authorized by Congress. Because of the shutdown, borrowers could not enroll in an IDR plan, recertify their income, apply to switch IDR plans or leave the SAVE plan forbearance, which has halted student loan forgiveness progress for more than eight million Americans. The AFT and the Trump administration then reached an agreement in April to pause the litigation to give the Department of Education time to ramp up IDR application processing. Borrowers could submit IDR applications again by the end of March, but processing did not fully resume until early May. Under the terms of the interim agreement, the department must file monthly status reports detailing loan servicers' progress in processing IDR applications. As of the May 15 status report, more than 1.9 million IDR applications remained outstanding. The Department of Education has been accepting IDR applications since the online form was restored at the end of March. But this month, MOHELA – one of the department's major contracted loan servicers – announced on its website that borrowers who submitted an IDR application prior to April 27, 2025 may need to reapply. 'Good news! Processing has resumed for IBR, PAYE, and ICR plans,' says the MOHELA announcement. 'Thanks to system updates, MOHELA can now quickly process applications with verified income. If you applied before April 27, 2025, your application didn't include income info. Please reapply at for faster processing. Your old application will then be canceled automatically.' MOHELA provided no additional details as to why borrowers who applied for IDR before April 27, 2025 would need to reapply, particularly those who did include income documentation with their application. No other Department of Education loan servicer (including Nelnet, Edfinancial, or Aidvantage) appears to have a similar message posted on their own websites. MOHELA has in the past been accused of providing misleading information to federal student loan borrowers. The servicer was penalized by the Biden administration for allegedly providing untimely or incorrect billing statements when student loan repayment resumed after the pandemic-era pause. More recently, MOHELA sent out misleading letters to borrowers in the SAVE plan forbearance, falsely suggesting that interest has been accruing on their balances. This prompted MOHELA to issue a clarifying statement on its website. The big question for many federal student loan borrowers is whether they actually need to reapply for IDR, particularly if they submitted an application prior to April 27, 2025, the cutoff date referenced in MOHELA's announcement. MOHELA's statement suggests that IDR applications submitted online through will be processed quickly, but it's unclear if that is actually happening (particularly without first evaluating the Department of Education's next scheduled court-mandated IDR status update, which isn't due until later this month). Here are some important considerations: For federal student loan borrowers with MOHELA-serviced loans who applied for IBR, ICR, or PAYE prior to April 27, 2025, and who properly included income documentation with their IDR application, the situation is less clear. MOHELA's statement on its website suggests these borrowers should reapply, but does not explain why, other than saying the applications did not include income documentation. Borrowers in this situation may want to contact MOHELA for clarification before submitting a new IDR request. However, reaching MOHELA may be difficult – Senator Elizabeth Warren (D-Mass) told Education Secretary Linda McMahon in a letter in March that the Department of Education had found that 'MOHELA took longer to answer borrowers' phone calls than any other federal loan servicer.'
Fast Company
19-05-2025
- Business
- Fast Company
Confused about your student loan status? Here's help
Between collections resuming, courts blocking student loan programs and layoffs at the Education Department, borrowers might be confused about the status of their student loans. Recently, the Education Department announced it would start involuntary collections on defaulted loans, meaning the roughly 5.3 million borrowers who are in default could have their wages garnished by the federal government. At the center of the turmoil are the government's income-driven repayment plans, which reduce monthly payments for borrowers with lower incomes. Those plans were temporarily paused after a federal court blocked parts of the plans in February. 'There's so much confusion, they've made it very complicated,' said Natalia Abrams, president and founder of the Student Debt Crisis Center. At the same time, some borrowers are struggling to get their loan servicers on the phone, making it hard to find answers to their questions, said Abrams. If you're a student loan borrower, here are some answers to your questions. What if I want to enroll in an income-driven repayment plan? Applications for income-driven repayment plans are open, but they're taking longer than usual to process. The applications were temporarily shut down earlier this year after a federal court in Missouri blocked the SAVE plan, a Biden administration plan that offered a faster path to loan forgiveness. The judge's order also blocked parts of other repayment plans, prompting the Education Department to pause income-driven applications entirely. Amid pressure from advocates, the department reopened the applications on May 10. Borrowers can apply for the following income-driven plans: the Income-Based Repayment Plan, the Pay as You Earn plan and the Income-Contingent Repayment plan. Abrams expects applications will continue to be approved but at a slower pace than before the application pause. Borrowers currently enrolled in an income-driven plan should be receiving notifications about recertification, said Khandice Lofton, counsel at the Student Borrower Protection Center. Recertification is required annually to update information on family size and income, and dates are different for each borrower. To review income-driven repayment plans, you can check the loan simulator at What if I applied to the SAVE plan? Borrowers enrolled in the SAVE plan have been placed in forbearance while a legal challenge is resolved. That means they don't have to make payments and interest is not accruing. Time in forbearance normally does not count toward Public Service Loan Forgiveness. The Education Department will notify borrowers with updates on payments and litigation. 'We don't know for sure when the SAVE forbearance is going to end,' Abrams said. While the future of the SAVE plan is decided in court, Abrams encourages borrowers to explore their eligibility for other income-driven repayment plans. What if I want to consolidate my student loans? The online application for loan consolidation is available again, at If you have multiple federal student loans, you can combine them into one with a fixed interest rate and a single monthly payment. The consolidation process typically takes around 60 days to complete. You can only consolidate your loans once. What if my loan was forgiven? It would be difficult for the Education Department to reinstate loans that were canceled during President Joe Biden's administration. So far, it isn't believed to be happening, Abrams said. What about the Public Service Loan Forgiveness program? Nothing has changed yet. President Donald Trump wants to change the Public Service Loan Forgiveness program to disqualify workers of nonprofit groups deemed to have engaged in 'improper' activities. He signed an executive order to that effect, but it has yet to be enforced. Borrowers enrolled in PSLF should keep up with payments to make progress toward loan forgiveness, said Sarah Austin, policy analyst at the National Association of Student Financial Aid Administrators. 'There could be some changes coming in regards to PSLF but at this current time PSLF is still functioning and there is still loan forgiveness being processed under the PSLF provision,' said Austin. An income-driven repayment tracker has disappeared from the federal student loan website for many borrowers, said Abrams. For keeping track of their status, Abrams is recommending that borrowers take screenshots of their payments. What if I can't get a hold of my loan servicer? Contacting your loan servicer is crucial to managing and understanding your student loans. Due to the large number of people trying to get answers or apply for programs, loan servicers are taking longer than usual to respond. Abrams recommends borrowers prepare for long wait times. 'We've heard borrowers being in hold for three or four hours, then being transferred to a supervisor and then being hung up on, after all that wait time. It's incredibly frustrating,' Abrams said. What can I do if I'm delinquent on my student loans? If you're delinquent, try to get back on track. Borrowers who don't make their payments for 270 days go into default, which has severe consequences. 'If you're delinquent but have not defaulted yet, do whatever you can do to avoid going default,' said Kate Wood, a student loans expert at NerdWallet. Borrowers who are delinquent on their student loans take a massive hit on their credit scores, which could drop 100 points or more, Wood said. A delinquency stays on your credit report for seven years. Wood recommends contacting your servicer to ask for options, which can include forbearance, deferment or applying for an income-driven repayment plan. What if I'm in default on my student loans? The Education Department is recommending borrowers visit its Default Resolution Group to make a monthly payment, enroll in an income-driven repayment plan or sign up for loan rehabilitation. Betsy Mayotte, president of The Institute for Student Loan Advisors, recommends loan rehabilitation. Borrowers in default must ask their loan servicer to be placed into such a program. Typically, servicers ask for proof of income and expenses to calculate a payment amount. Once a borrower has paid on time for nine months in a row, they are taken out of default, Mayotte said. A loan rehabilitation can only be done once. What happened to Fresh Start? The Fresh Start program was a one-time temporary program that helped borrowers get out of default. This program ended Aug. 31, 2024. The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.
