{"id":11323,"date":"2025-03-07T11:07:58","date_gmt":"2025-03-07T11:07:58","guid":{"rendered":"https:\/\/finderica.com\/?p=11323"},"modified":"2025-03-07T11:07:58","modified_gmt":"2025-03-07T11:07:58","slug":"income-driven-repayment-applications-shut-down-student-loan-borrowers-left-in-the-dark","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=11323","title":{"rendered":"Income-Driven Repayment Applications Shut Down, Student Loan Borrowers Left In the Dark"},"content":{"rendered":"
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The U.S. Education Department took down the online and paper applications for all income-driven repayment (IDR) plans on Feb. 21, following the latest legal ruling in a lawsuit against the new IDR plan, <\/span>Saving on a Valuable Education (SAVE)<\/span>. <\/span><\/p>\n<\/div>\n

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\u201cA federal Circuit Court of Appeals issued an injunction preventing the U.S. Department of Education from implementing the SAVE Plan and parts of other income-driven repayment (IDR) plans. The Department is reviewing repayment applications to conform with the 8th Circuit\u2019s ruling. As a result, the IDR and online loan consolidation applications are currently unavailable,\u201d an <\/span>Education Department<\/span> spokesperson said. <\/span><\/p>\n<\/div>\n

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That means borrowers cannot currently apply for SAVE or any of the other three <\/span>IDR plans<\/span>: Paye as You Earn (PAYE), Income-Contingent Repayment (ICR) or Income-Based Repayment (IBR).<\/span><\/p>\n<\/div>\n

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The online IDR application was previously unavailable last year from July through September. Paper IDR applications remained as a workaround then, though there were processing delays. <\/span><\/p>\n<\/div>\n

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\u201cThe risk of harm to borrowers is much higher this time,\u201d says Abby Shafroth, co-director of advocacy at the National Consumer Law Center. The temporary <\/span>student loan “on ramp”<\/span> that kept borrowers who missed payments from going into delinquency or default ended on Sept. 30, so borrowers who can’t afford standard payments but are blocked from applying for an IDR plan may now be unfairly penalized, she says. <\/span><\/p>\n<\/div>\n

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Here’s who is affected by the <\/span>IDR application<\/span> suspension and what options you have.<\/span><\/p>\n<\/div>\n

Borrowers who need to recertify their income for IDR plans<\/span><\/h2>\n
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As a result, some borrowers on IDR plans could be penalized through no fault of their own. Borrowers who miss their recertification deadline risk getting kicked out of their IDR plan and could see their balance balloon with <\/span>capitalized interest<\/span>, Shafroth says. (Interest capitalizes when you leave the IBR plan.) <\/span><\/p>\n<\/div>\n

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Borrowers with at least one loan in the SAVE plan don\u2019t have to worry about this yet: Their recertification deadlines were previously moved out to at least February 2026, according to the latest Education Department guidance. <\/span><\/p>\n<\/div>\n

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Student loan servicers<\/span> are waiting on the Education Department to provide guidance on recertification for the other three IDR plans, says Scott Buchanan, executive director of the Student Loan Servicing Alliance. However, he expects recertification deadlines to be pushed back for all IDR borrowers. <\/span><\/p>\n<\/div>\n

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In the meantime, servicers will work with borrowers who have looming certification deadlines to help them avoid getting penalized, Buchanan says. <\/span><\/p>\n<\/div>\n

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\u201cIf [borrowers] have a recertification date that is coming up, reach out to the servicer and say, \u2018hey, what can I do here?\u2019 Because that’s changing day by day,\u201d Buchanan says. Servicers will contact borrowers once they get government guidance about IBR, ICR and PAYE recertification deadlines, so keep an eye on your inbox, he says.<\/span><\/p>\n<\/div>\n

What you can do<\/span><\/h3>\n
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