The Trump administration has shut down key student loan repayment plans, leaving millions of borrowers in financial uncertainty.
Public Service Loan Forgiveness (PSLF) and Income-Driven Repayment (IDR) programs are now at risk after the Department of Education removed IDR applications from its website.
Many borrowers are unable to continue their progress toward loan forgiveness, and experts warn that the situation may not improve anytime soon.
Borrowers Struggle as Loan Repayment Options Disappear
The Department of Education quietly took down applications for all IDR plans, including SAVE (Saving on a Valuable Education), Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Income-Contingent Repayment (ICR).
The removal happened after a recent ruling by the 8th Circuit Court of Appeals, which blocked Bidenโs SAVE plan. Instead of allowing borrowers to apply for other IDR plans, the Trump administration went further by suspending all IDR processing entirely.
People enrolled in PSLF must be on an IDR plan or the Standard Repayment Plan to qualify for forgiveness after 120 payments. With no access to IDR plans, many borrowers are left in financial limbo, unable to make qualifying payments toward forgiveness.
Court Ruling Sparks Student Loan Crisis
The 8th Circuit Court’s decision halted Bidenโs SAVE plan, which aimed to provide lower payments and automatic loan forgiveness for millions of borrowers.
That ruling did not directly target other IDR plans or PSLF, but the Trump administration took the opportunity to freeze all IDR applications and processing.
The Department of Education did not issue a public statement before making the changes, causing confusion and panic among borrowers.
Legal experts say the Trump administrationโs move goes beyond the court ruling. Natalia Abrams, president of the Student Debt Crisis Center, called the decision โa purposeful attack on borrowers.โ The Department of Education now claims it must revise IDR applications to comply with the ruling, a process that could take months.
Early this morning, I had the pleasure of speaking with @AmaraWalker on @CNN about why @POTUS needs to #CancelStudentDebt NOW! pic.twitter.com/rvui3KSxpi
โ Natalia Abrams (@nataliaabrams) August 14, 2022
PSLF Borrowers Face Uncertainty
Public sector workers relying on PSLF are among the hardest hit. Borrowers need to make 120 qualifying payments under an eligible repayment plan to get loan forgiveness. The government had previously allowed paused payments to count toward PSLF, but those in the current forbearance period are no longer getting credit.
Anyone who was in the SAVE plan has no way to switch to another IDR plan, and those who had pending IDR applications now face indefinite delays. The only available option is the Standard Repayment Plan, which often requires much higher payments that many public service workers cannot afford.
“Buyback” May Offer a Temporary Solution
Borrowers stuck in forbearance may be able to buy back lost months once the Department of Education finalizes its new rules. The Buyback program allows people to make retroactive payments for months that did not count toward PSLF or IDR forgiveness.
That option is not guaranteed to last. Mark Kantrowitz, a student loan expert, warns that the Trump administration may eliminate the Buyback option in future policy changes. Borrowers who have reached 120 payments but missed months due to previous forbearance should act quickly.
The DOE has removed the student loan forgiveness application from its website.
Student loan expert @mkant provides options for student borrowers who are experiencing financial difficulty: pic.twitter.com/Tdbj2a8YNa
โ Yahoo Finance (@YahooFinance) March 3, 2025
Borrowers Should Document Payment History
Payment tracking errors have been common in PSLF, and the recent changes could lead to more miscalculations. Experts recommend that borrowers:
- Print payment history from StudentAid.gov
- Create a personal record of payments in a spreadsheet
- Verify employer certification annually using the PSLF help tool
Loan servicers often miscalculate qualifying payments. Having personal records can help borrowers fight back against errors.
Uncertain Future for Student Loan Forgiveness
No clear timeline exists for when IDR applications will return. Reports indicate that the processing freeze could last at least three months or longer, creating a massive backlog once applications reopen. Millions of borrowers waiting to enroll in an IDR plan or recertify income could see long delays.
Experts suggest that borrowers remain alert for policy updates and consider financial alternatives if necessary. The student loan system remains unpredictable, and the Trump administrationโs recent actions have left millions of borrowers searching for answers.
Another move in a series of headline-grabbing decisions, Trump once again ensures his name dominates the newsโno matter the topic.
