The Department of Education just dropped a major update on how it’s handling student loan repayment plans, and if you’ve been stuck in limbo since February, this matters.
After pausing all income-driven repayment (IDR) processing due to a federal court ruling on the SAVE plan, the department is finally moving forward. Borrowers who applied for the older IDR plans, ICR, IBR, and PAYE, will start seeing movement. According to Acting Under Secretary David Bergeron, servicers were told to start placing eligible borrowers into those plans “as soon as possible.”
For now, applications under the SAVE plan remain frozen. The department expects the SAVE program to be fully blocked soon due to ongoing legal battles. So if you were in SAVE and didn’t switch to another plan, you’re likely stuck in forbearance for now, and those months won’t count toward forgiveness.
Here’s what’s changing: borrowers who applied for ICR, IBR, or PAYE and filed taxes as single (or married with no income) are back in processing. Everyone else? You’ll have to wait until May 10, when the Education Department says all IDR application processing should resume. But expect delays, servicers have a backlog, and the systems still need updates.
There was also some confusion about how married borrowers will be treated. Initially, it looked like spousal income would be factored into payment calculations, even for couples filing taxes separately. That’s now been walked back. The department clarified on April 15 that only family size, not income, will be considered in those cases. It’s a small but important change for anyone relying on IDR to keep monthly payments low.
If your IDR application isn’t processed within 60 days, you’ll move from “processing forbearance” to general forbearance, and only the former might count toward Public Service Loan Forgiveness (PSLF). If you’re aiming for PSLF, those 60 days are critical. The rest won’t help unless you qualify for the PSLF Buyback program, which allows certain non-qualifying months to count, if you meet strict criteria.
The bottom line? If you’ve applied for IBR, PAYE, or ICR, you’re back in line. SAVE borrowers should start thinking about alternatives. And if you’re counting on forgiveness, stay sharp, processing delays and policy confusion are far from over.
