Department of Education Announces Major Updates to Student Loan Repayment Plan Processing

The Trump administration** has released several major updates concerning the processing of income-driven repayment (IDR) plan requests, providing critical new guidance to student loan borrowers seeking affordable payments and long-term student loan forgiveness.

In February, the Department of Education suspended all IDR application processing following a federal appeals court ruling related to the SAVE plan. This plan, one of four current IDR options, ties monthly payments to income and family size and offers forgiveness after 20 or 25 years of repayment.

**The Trump administration** explained that halting IDR processing was necessary to update applications and payment calculations to comply with the court's decision.

## Legal Challenge from AFT

In March, the American Federation of Teachers (AFT) filed a lawsuit against **the Trump administration**, arguing that the complete shutdown of IDR plan processing was unlawful. The AFT requested a temporary restraining order to force the Department of Education to resume processing applications for ICR, IBR, and PAYE — plans not directly impacted by the court's injunction.

## Department of Education Responds with Key Updates

In response to the AFT lawsuit, Acting Under Secretary of Education David Bergeron submitted a sworn declaration outlining how and when IDR processing would resume:

### SAVE Plan Unlikely to Resume

According to the declaration, student loan payments under the SAVE plan are not expected to resume — possibly ever. Bergeron confirmed that **the Trump administration** anticipates the SAVE plan will be “enjoined in its entirety.”

Borrowers currently in forbearance under the SAVE plan, who have not switched to another IDR option, will remain in this status. While interest is paused, these months will not count toward forgiveness under IDR or Public Service Loan Forgiveness (PSLF).

### IDR Processing Restarting for ICR, IBR, and PAYE

For borrowers applying under ICR, IBR, or PAYE, processing is already starting to ramp up. According to Bergeron:

> “Education directed its servicers to resume placing borrowers that apply for ICR, PAYE and IBR into their respective plans as soon as possible.”

Servicer MOHELA confirmed that applications from single borrowers or married borrowers with no income are now being processed. Others remain on hold for the time being.

### Full IDR Processing Expected by May 10

Bergeron stated that **the Trump administration** expects loan servicers to fully resume IDR processing for ICR, IBR, and PAYE by **May 10, 2025**.

Borrowers currently on the SAVE plan who apply to switch to another IDR plan may also be placed into their new plan around that date. However, due to backlogs, the department has not given a timeline for completing all applications.

### Spousal Income Controversy and Update

An earlier declaration indicated that spousal income would be included in payment calculations for married borrowers — even those filing taxes separately — sparking concern. However, an amended filing clarified that only **family size**, not spousal income, will be considered in those cases.

This clarification aligns with federal law, which requires that IBR payments for married borrowers filing separately be calculated based on individual income.

## Forbearance Periods and Forgiveness Eligibility

The Department of Education will place borrowers in a **processing forbearance** during IDR application review. This period:

 **Counts toward PSLF** eligibility.

**Does not count toward standard IDR forgiveness.**

If the application isn’t processed within 60 days, borrowers will enter a general forbearance, which does not count toward either forgiveness program.

## PSLF Buyback Still an Option for Some

Borrowers pursuing forgiveness under PSLF may still be able to count time spent in administrative or general forbearance through the **PSLF Buyback program** — but only if they have 120 months of qualifying employment and the buyback brings them to forgiveness eligibility.

However, the department has not provided clarity on when buyback applications will be processed or approved.

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