5 Major Updates On Student Loan Payment Plans As Lawsuits Continue

There have been several significant developments this week that will impact millions of student loan borrowers trying to navigate an array of repayment plans and student loan forgiveness programs that have been embroiled in turmoil.

For the last several weeks, borrowers have lost access to income-driven repayment plans. IDR plans are affordable repayment options mandated by Congress to allow borrowers to repay their federal student loans based on a formula applied to their income and family size. Payments are typically required to be recalculated every 12 months, and borrowers who haven’t repaid their balance in full within 20 or 25 years can receive loan forgiveness. Enrolling in IDR plans is also usually required for those who are pursuing Public Service Loan Forgiveness, a separate program that can eliminate federal student loan debt in as little as 10 years for nonprofit and government workers, who typically earn less than their private-sector counterparts.

But following a recent decision from a federal appeals court in an ongoing legal battle over one of several IDR options, the Trump administration removed the IDR application from the Department of Education’s website and instructed loan servicers to suspend all processing. The American Federation of Teachers, a national labor union representing educators, filed a legal challenge last week, arguing that the administration was unlawfully preventing borrowers from accessing these programs that Congress and loan promissory notes require to be offered.

Here’s where things now stand.

Department Of Education Has Restored Access To Student Loan Payment Plans Based On Income

On Wednesday, less than 24 hours after the AFT filed a motion for a temporary restraining order to force the reopening of IDR plans, the Trump administration restored access to the IDR application. The online application is now available at StudentAid.gov, although the downloadable PDF version of the application has not been returned to the Department of Education’s online forms library.

The Trump administration blamed its suspension of IDR plans on the ongoing legal battle over the SAVE plan, which was created by President Joe Biden two years ago. The Department of Education indicated that the income-driven repayment application had to be revised given the scope of the recent court order. The AFT had argued that nothing in the ruling by the 8th Circuit Court of Appeals prevented the Department of Education from continuing to accept enrollments in the other three income-driven plans – ICR, IBR, and PAYE.

“A federal appeals court struck down another one of the Biden Administration’s illegal efforts to transfer student loan debt to taxpayers,” said Acting Under Secretary of Education James Bergeron in a statement on Wednesday. “In response, the Trump Administration substantially revised the income-driven repayment plan application to conform with the ruling. Our team was able to relaunch this application within weeks, ensuring borrowers have access and the ability to access all legal repayment plans.”

Student Loan Forgiveness And Lower Payments Under The SAVE Plan Remain Blocked

While IDR application access is now restored, the SAVE plan remains blocked. SAVE was intended to provide a number of benefits including lower payments relative to other income-driven repayment plans, an interest subsidy intended to halt runaway balance growth associated with interest accrual, and faster student loan forgiveness than other IDR plans in some cases. But following the 8th Circuit’s decision in February that reaffirmed and broadened the ongoing injunction blocking SAVE, borrowers still cannot enroll in that plan.

Those who were already in the SAVE plan when the legal battle began will remain in a forbearance for now. No payments are due during the forbearance, and interest shouldn’t be accruing, but all progress toward student loan forgiveness for IDR and PSLF is effectively halted while the forbearance continues. There is no set end-date for the forbearance at this time, as it is dependent on when the courts issue a final ruling in the SAVE plan legal challenge.

“You will be in this forbearance until servicers are able to accurately calculate monthly payment amounts or the court reaches a decision on the availability of the SAVE Plan,” says updated Department of Education guidance.

Other IDR Plans Should Now Open For Student Loan Borrowers

While the SAVE plan remains blocked, the Department of Education has restored access to the other three income-driven repayment plans – ICR, IBR, and PAYE. That means that borrowers not enrolled in an IDR plan can now apply, and those who are stuck in the SAVE plan forbearance and want to resume progress toward student loan forgiveness can apply to change their plan.

“As of March 26, 2025, the online IDR application is once again available for eligible borrowers to apply for the Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Income-Contingent Repayment (ICR) Plans,” says the updated guidance.

“Borrowers can now apply for the Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Income-Contingent Repayment (ICR) Plans using the updated IDR application,” confirms the Department of Education press release.

This information directly conflicts with a statement on the department’s IDR website, which says, “Under current regulations, the PAYE Plan is available only to borrowers who are already enrolled and is no longer accepting new enrollments. The ICR Plan is available only to borrowers who are already enrolled in the ICR Plan and to parent PLUS loan borrowers who consolidate to repay their loans.”

As a result, there remains at least some degree of uncertainty about whether borrowers can actually access PAYE and ICR. However, the statement on the IDR webpage may simply be incorrect, given that the more recent information the department issued via its press release and updated guidance webpage appear to confirm that these two plans, in addition to IBR, are available for student loan borrowers.

IDR Processing Remains Suspended, Leaving Student Loan Borrowers In Limbo

While the restoration of the IDR application is good news for many student loan borrowers, processing of those applications remains suspended for now. It’s unclear when processing will resume.

“Although the IDR application is now available, loan servicers are still updating their systems in accordance with the court’s actions,” says the Department of Education guidance. “Servicers will begin processing applications in the near future.”

The AFT, represented by the Student Borrower Protection Center, intends to continue with its legal challenge against the Trump administration, given that the department and its loan servicers are still not processing IDR requests even though application access is now restored.

“After denying borrowers their right to apply for affordable repayment options for nearly a month, ED’s decision to restore IDR applications reaffirms what borrowers already knew: This relief should never have been taken away,” said SBPC Deputy Executive Director and Managing Counsel Persis Yu in a statement on Tuesday. “Behind every delayed application is a real human—like the teachers, nurses, and public service workers who courageously shared with the court statements about watching their PSLF countdown clocks freeze and bills piling up. Every day these applications go unprocessed deprives borrowers of critical time toward PSLF relief and financial stability.”

A hearing on the AFT’s motion for a temporary restraining order is scheduled for later in April.

IDR Recertification Dates Are Being Moved, Giving Student Loan Borrowers More Time

Meanwhile, as part of the reopening of applications, the Department of Education also announced that loan servicers will be pushing out IDR income recertification deadlines to early 2026. Since borrowers must use the IDR application to comply with the requirement to recertify their income annually, some were unable to recertify during the application outage, leading to substantial increases in monthly payments in some cases once the recertification deadline lapsed.

The department says that for borrowers who had a recertification deadline on or before February 20, 2025, no action is required for those who recertified their income and had their request timely processed. For those whose loan servicer did not timely process their request, “then your recertification date will be extended by one year,” reads the guidance. “You do not need to submit a recertification request at this time.” Other borrowers who had a pre-February 20th recertification deadline and have experienced a spike in monthly payments should “submit a recertification request as soon as possible to potentially lower your payment,” says the guidance.

For borrowers who had an IDR recertification deadline after February 20th, the department indicates that those deadlines are being pushed out by one year. “You do not need to submit a recertification request at this time,” says the guidance.

The department says that student loan borrowers who were unable to recertify their income and experienced a jump in monthly payments as a result should see their accounts get corrected and reduced. “Loan servicers are actively working to move those affected borrowers back to the monthly payment amount based on their income and family size,” says the guidance. However, the timeline is unclear. Borrowers who cannot afford their monthly payments can request a temporary forbearance, but depending on the type of forbearance, it may or may not count toward student loan forgiveness under IDR and PSLF. Borrowers should contact their loan servicer for more information.