Trump administration removes application for popular student loan repayment programs
2 weeks ago
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The Trump administration has unexpectedly taken down the online application form for several popular student debt repayment plans, baffling borrowers as well as experts who say the decision could create complications for millions of Americans with outstanding loans.
Late on Friday, Department of Education officials quietly removed the application portal for both loan consolidations and income-driven repayment plans, which cap what borrowers must pay each month at a percent of their earnings. The move followed a federal appeals court decision earlier in the week that continued a pause on former President Biden’s SAVE program, an income-driven plan that would have forgiven debts after as few as 10 years of payments.
But by shutting down the application form, the administration appears to be closing off access to repayment options that were not at issue in the litigation. It’s now uncertain how borrowers who were already enrolled in income-driven plans are supposed to submit their annual paperwork certifying their incomes.
“What’s not clear is whether they are simply pulling down the online application so they can make some changes and then they’ll get it back up and people will continue to apply — or if they are pulling it down for an extended period and blocking borrowers from enrolling in these plans,” said Abby Shafroth, director of the National Consumer Law Center’s Student Loan Borrower Assistance Project.
The Department of Education, which has not issued any detailed guidance to students, did not return requests for comment.
The confusion marks the latest turn in a battle over the shape of the federal student loan program that’s left many borrowers in limbo for the better part of a year. Biden’s SAVE plan has been on hold since last summer thanks to a lawsuit brought by a group of Republican state attorneys general who argued that its generous forgiveness features were illegal. As a result, about 8 million borrowers who enrolled in SAVE before it was halted currently have their loans in forbearance while the litigation rolls on.
Read more: What are federal student loans?
Last week, a panel on the Eighth Circuit Court of Appeals upheld the preliminary injunction pausing SAVE. But the judges went further, ordering a lower court to also pause loan forgiveness that had been available under an older repayment program known as REPAYE, which Biden officials had revived when SAVE was put on ice.
Department of Education officials appear to have responded by removing the application portal for income-driven plans without making a wide announcement. Instead, they posted a banner warning at the top of StudentAid.gov.
“A federal court issued an injunction preventing the U.S. Department of Education from implementing the Saving on a Valuable Education (SAVE) Plan and other income-driven repayment (IDR) plans,” it stated. “As a result, the IDR and loan consolidation applications are currently unavailable.”
Under the Biden administration, Department of Education officials temporarily took down the application portal after losses in court forced it to make necessary tweaks. But the Trump administration has not explained its plans or given a timeline for putting it back up.
The U.S. Department of Education building is seen in Washington, DC, February 13, 2025. (Photo by SAUL LOEB / AFP) (Photo by SAUL LOEB/AFP via Getty Images) ·SAUL LOEB via Getty Images
Student aid experts who spoke with Yahoo Finance called the administration’s move hasty and noted that the shuttered portal is also used to apply for the old Income-Based Repayment program, which was not challenged as part of the litigation. That plan has fallen out of fashion in recent years because it caps payments at a relatively high 15% of income, only forgives debt after 20 years, and has stricter eligibility rules. However, it’s still a fallback option for borrowers who can’t afford their payments on a standard 10-year plan or who want to make progress toward Public Service Loan Forgiveness.
Learn more: How to pay off your student loans quickly
“Nothing in this court order should affect income-based repayment,” said Mike Pierce, co-founder of the Student Borrower Protection Center. “That should work.”
Cutting off the portal has also led to widespread confusion among borrowers already on income-driven plans who are required to annually update the amount they earn. Failing to do so can cause their monthly payments to spike and interest on their loans to be capitalized into principal.
Borrowers enrolled in forbearance thanks to SAVE have already had their certification deadline pushed to next year. But the Department of Education hasn’t offered similar extensions to the roughly 4.5 million individuals enrolled in other income-driven programs.
“Some of those borrowers have recertification deadlines this month or next month,” said NCLC’s Shafroth. “Are those borrowers still going to be required to rectify or be kicked out of their plans and face interest capitalization? Or is the department going to push back their recertification deadlines?”
On Reddit’s forums dedicated to student loans, some borrowers have been advising each other to submit income certifications or apply for an income-driven plan by manually submitting paperwork to their servicers, but it’s unclear whether those forms will be processed. Yahoo Finance reached out to each of the major loan servicing companies, all of which either did not respond or directed questions to the Department of Education.
Jordan Weissmann is a Senior Reporter at Yahoo Finance.
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