The US Department of Education has announced the reopening of online applications for income-driven repayment (IDR) plans and loan consolidation. The application process was temporarily paused to comply with the 8th Circuit Court of Appeals injunction last month, which halted the Biden administration’s Saving on a Valuable Education (SAVE) Plan and parts of other IDR plans.
According to the Trump administration, the available IDR plans now include Income-Based Repayment, Pay As You Earn, and Income-Contingent Repayment, as reported by CNBC.
“A federal appeals court struck down another one of the Biden Administration’s illegal efforts to transfer student loan debt to taxpayers. In response, the Trump Administration substantially revised the income-driven repayment plan application to conform with the ruling,” said Acting Under Secretary James Bergeron, as reported by the Education Department.
Congress originally established IDR plans in the 1990s to make student loan payments more manageable. These plans cap borrowers’ monthly payments at a percentage of their discretionary income and forgive any remaining debt after 20 or 25 years, as reported by CNBC. As of September 2024, more than 12 million borrowers were enrolled in IDR plans.
The reinstatement of IDR applications is expected to bring relief to millions of borrowers seeking affordable repayment options. However, legal battles over student debt policies continue to shape the future of loan forgiveness programs. Advocates argue that further reforms are necessary to ensure long-term financial stability for borrowers.
