Education Department removes access to certain student loan plan applications
The Education Department says it has temporarily taken down access to applications for income-driven repayment (IDR) student loan plans in response to a court order.
“A federal Circuit Court of Appeals issued an injunction preventing the U.S. Department of Education from implementing the SAVE Plan and parts of other income-driven repayment (IDR) plans. The Department is reviewing repayment applications to conform with the 8th Circuit’s ruling," a department spokesperson said.
“As a result, the IDR and online loan consolidation applications are currently unavailable. In the meantime, borrowers can still submit a paper loan consolidation application. The Department updated information for borrowers on StudentAid.gov, including the page about court actions related to SAVE," they added.
The SAVE plan is an IDR option the Biden administration created after its universal student debt relief hope fell; a federal judge said the plan went beyond the scope of the Education Department’s authority.
But other IDR plans, such as for individuals who have been paying on their loans for 20 to 25 years, are now caught in the crossfire.
“Let’s be clear. This was a purposeful decision by the Trump Administration to harm borrowers and in no way needed to be done. Shutting down access to income-driven repayment plans was not the decision of the 8th Circuit — it was a malicious move by the Administration that will create serious hardship for millions of working families,” said Natalia Abrams, president and founder of Student Debt Crisis Center.
“This decision to cut off affordable repayment options, which Congress passed and borrowers rely on, is devastating. At the same time, the Administration is proposing up to $330 billion in cuts to federal aid, including student loan programs. There is absolutely no doubt that borrowers will suffer from this action,” she added.
It is unclear how long the applications will be down for, and student loan borrowers will not be able to sign up or switch plans until the forms are back up.
The inability to switch plans come at a time as House Republicans are looking to make changes to the student loan system in their budget plans, potentially raising payments on borrowers.