Anna Moneymaker/Getty Images
Millions of student-loan borrowers are still waiting for cheaper monthly payments.
President Donald Trump’s Department of Education wrote in a legal filing on May 15 that, as of April 30, nearly 2 million student-loan borrowers’ income-driven repayment applications were still pending. The department said just over 79,000 applications were processed during the month of April.
This data is the first glimpse into the Department of Education’s work to process income-driven repayment applications since the department initially removed online access to the forms for a couple of weeks beginning in late February.
The department said at the time that it took down the applications to comply with a federal court’s preliminary injunction on SAVE, one type of income-driven repayment plan created by former President Joe Biden. The court did not explicitly direct the department to remove the online forms.
An Education Department spokesperson told Business Insider that Biden’s administration caused the backlog.
“The Trump Administration is actively working with federal student loan servicers and hopes to clear the Biden backlog over the next few months,” the spokesperson said.
In the meantime, some borrowers have been placed on processing forbearance, during which servicers recalculate their monthly payments, and interest still accrues. In contrast, borrowers enrolled in the SAVE plan are in a forbearance during which interest will not accrue, and they will not receive credit toward loan forgiveness.
It is possible that the backlog began last summer when a federal court blocked implementation of Biden’s SAVE plan, which was intended to give borrowers cheaper monthly payments and a shorter timeline to loan forgiveness. The ruling also blocked income-driven repayment plan processing, and while Biden’s Department of Education said in December that processing had resumed for some repayment plans, it would take time for servicers to work through the applications.
The American Federation of Teachers filed a lawsuit against the Department of Education for initially removing online access to income-driven repayment applications. These applications allow borrowers to receive more affordable monthly payments that count toward Public Service Loan Forgiveness.
As part of the ongoing litigation, the department is required to provide updates on the number of applications it processes every 30 days. AFT President Randi Weingarten said in a statement that the backlog is “outrageous and unacceptable.”
“It is all the more concerning that until their applications are processed, these borrowers are being denied credit toward debt cancellation under the PSLF program,” Weingarten said.
This data came just 10 days after the Trump administration restarted collections on defaulted student loans after a five-year pause that began under Trump and was continued under Biden. The department already sent notices to nearly 200,000 borrowers that their federal benefits are at risk of garnishment in early June, and 5 million defaulted borrowers could see wage garnishment later this summer.
Are you a student-loan borrower with a story to share? Reach out to this reporter at [email protected].
The post Nearly 2 million student-loan borrowers are still waiting to learn if they’ll get affordable monthly payments appeared first on Business Insider.
