Student Loan Borrowers Unable to Access Lower Payment Plans

As the Trump administration pushes forward with major changes to the federal student loan system, many borrowers in the Public Service Loan Forgiveness (PSLF) program are growing concerned about its future.

“There’s a lot of panicking by PSLF borrowers due to the uncertainty,” said higher education expert Mark Kantrowitz.

Created in 2007 under President George W. Bush, PSLF allows government and nonprofit employees to have their federal student loan forgiven after 10 years of qualifying payments. However, recent legal battles and policy changes are disrupting the program, leaving many borrowers unsure of their progress toward loan forgiveness.

Key Changes Affecting PSLF Borrowers

1. Applications for Income-Driven Repayment (IDR) Plans Suspended

The Trump administration has temporarily removed applications for income-driven repayment (IDR) plans from the U.S. Department of Education’s website. Since PSLF requires borrowers to be enrolled in an IDR plan or the Standard Repayment Plan, this suspension is a major roadblock for those seeking forgiveness.

The move follows a decision by the 8th Circuit Court of Appeals, which blocked President Biden’s SAVE plan (Saving on a Valuable Education) and halted loan forgiveness under other IDR plans.

➡ Impact: While the ruling does not directly affect PSLF, the inability to enroll in IDR plans delays borrowers’ eligibility for loan forgiveness.

2. PSLF Credit Stalled for Some Borrowers

During the Biden administration, borrowers affected by the SAVE ruling were placed in forbearance, meaning payments were paused, and no interest accrued. However, unlike the pandemic-era pause, these borrowers are not receiving PSLF credit for this period.

➡ Who’s Affected?

• SAVE enrollees: No PSLF credit is earned during this pause.
• Other IDR plan enrollees: They will continue to earn credit as long as they make payments and work in qualifying jobs.

The Education Department is currently adjusting its repayment plan applications to comply with the court order, but experts warn it could take months before they are restored.

➡ Temporary Fix: Borrowers can switch to the Standard Repayment Plan to maintain PSLF credit. However, payments under this plan are often too high for public sector and nonprofit workers.

3. The ‘Buy Back’ Program Offers Hope

Despite these setbacks, borrowers may eventually be able to buy back months that didn’t count toward PSLF.

➡ How It Works:

• The Education Department’s Buyback Program allows borrowers to make lump-sum payments for months spent in forbearance or deferment, effectively turning them into qualifying PSLF payments.

“While frustrating, this option could help borrowers make up for lost time,” said Betsy Mayotte, president of The Institute of Student Loan Advisors.

With PSLF applications stalled, forbearance impacting credit, and uncertainty surrounding IDR plans, borrowers should stay informed about potential policy changes.

In the meantime, experts urge borrowers to document their PSLF progress and explore alternative repayment options while waiting for further guidance from the Education Department.