What you need to know about changes to student loan repayment plans

If you have federal student loans and you’re enrolled in an income-driven repayment plan, there are changes you need to know. The U.S. Department of Education said it temporarily stopped taking applications for income-driven repayment plans. It’s the latest turn in court battles over student loan debt relief.

IDR PLANS

A banner on the federal studentaid.gov website says a federal court injunction stops the Department of Education from implementing the Saving on a Valuable Education, or SAVE plan, and parts of other income-driven repayment plans.

Online IDR and loan consolidation applications are temporarily unavailable, according to the update. The banner directs borrowers to submit a paper loan consolidation application.

Sabrina Calazans, executive director of the nonprofit Student Debt Crisis Center, said it’s not clear if borrowers pursuing loan forgiveness would see their repayment history impacted - if they apply for loan consolidation.

“Things are very up in the air right now,” Calazans said of the changes.

Calazans said borrowers enrolled in the SAVE plan are currently unable to apply for another income-based repayment option. She also said it’s unclear what’s next for borrowers who had applications pending for IDR plans.

As of Friday, studentaid.gov’s online FAQ for borrowers in the SAVE plan said borrowers in general forbearance would remain in this forbearance until loan servicers calculate monthly payments. The FAQ said the Education Department doesn’t expect that to happen any sooner than this September, with first payments due no earlier than December of 2025. Borrowers under general forbearance weren’t required to make monthly payments and interest was not accruing. Borrowers were not getting credit toward loan forgiveness under this general forbearance.

In an email to NBC 5 Responds, a Department of Education Spokesperson writes, “A 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 8^th Circuit’s ruling.”

The spokesperson added, “The IDR and online loan consolidation applications are currently unavailable. In the meantime, borrowers can still submit a paper loan consolidation application. The Department updated information for borrowers on StudentAid.gov, including the page about court actions related to SAVE.”

PREPARING FOR PAYMENTS

Bankrate Consumer Lending Analyst Denny Ceizyk told our colleagues at NBC 10 Responds the conversation is shifting from loan forgiveness to repayment.

“Anyone with student loan balances is going to need to find out, first of all, what kind of payment options are available to them and then start really looking at their budget to see how much of a payment they can handle,” said Ceizyk.

You can find the Education Department’s online loan simulator here.

If you can’t afford your federal student loan payment, applying for forbearance or deferment may be an option. Borrowers should understand the trade-offs.

If you haven’t in a while, Calazans said borrowers should take a moment to update their records. Log into your studentaid.gov dashboard and loan servicer’s portal and keep your information on hand.

“You can screenshot, take pictures, print whatever you need to do,” said Calazans. “Look up how many public service loan forgiveness credits you have if you're eligible for that program, if you’ve applied in the past, how many income-driven repayment credits you have, what repayment plan you're in and your current balance.”

Calazans also warned borrowers of scams. For example, someone may contact you and claim you need to act fast to have a loan forgiven before a program is discontinued.

Studentaid.gov also explains the Department of Education and loan servicer partners will never ask for your studentaid.gov username or password. Scammers may spoof a legitimate-looking phone number or email address. The Department of Education shares a list of legitimate email addresses and text numbers that may contact borrowers here.

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