Over 800,000 Student-Loan Borrowers Await Payment Relief

More than 800,000 student-loan borrowers are currently experiencing delays in accessing reduced payment options through income-driven repayment (IDR) plans. As of November 30, the Department of Education had over 802,730 pending IDR applications, according to a recent court filing. This leaves borrowers in a state of uncertainty regarding when they can expect relief.

The Department of Education, under the administration of former President Donald Trump, reported minimal progress in processing these applications. In the month of November alone, the department discharged loans for 170 borrowers enrolled in IDR plans. Additionally, 280 borrowers successfully received loan forgiveness through the Public Service Loan Forgiveness (PSLF) program, which offers relief after ten years of qualifying payments for government and nonprofit employees.

Legal Action and Future Changes

These updates come following an agreement between the Department of Education and the American Federation of Teachers (AFT). The AFT had previously filed a lawsuit against the department, alleging undue delays in processing applications and failing to provide borrowers with the relief they are entitled to. In response, the department indicated its commitment to processing more forgiveness applications for those on IDR plans, although the timeline for resolving the backlog remains unclear.

Looking ahead, significant changes to repayment plans are set to be implemented in July 2026. These changes include the introduction of a new repayment plan, adjustments to borrowing limits for graduate and professional loans, and modifications to PSLF eligibility criteria. With these alterations on the horizon, many borrowers are preparing for potential increases in their monthly payments, adding to their anxiety about the future.

Moreover, recent tax changes could further complicate matters for borrowers. A provision from the American Rescue Plan that currently exempts student-loan forgiveness from taxation is set to expire in January 2026. Borrowers who reach their payment threshold for relief before this date but have not received approval for discharge could face substantial tax liabilities.

Borrower Experiences and Concerns

As the situation unfolds, many borrowers are sharing their concerns about the impending changes. Jennifer Oakes, a 41-year-old borrower, expressed her unease, stating, “My overall general feeling is anxiety and nervousness about it because we really don’t know what’s going to happen.” With the potential for increased payments and tax implications, many borrowers are left feeling uncertain about their financial futures.

As the Department of Education continues to navigate these challenges, the situation for student-loan borrowers remains precarious. Many are looking for clarity and timely assistance as they await updates on their applications and potential relief. The department’s ongoing efforts to address the backlog and implement new policies will be closely watched by those affected by student debt.