Over 800,000 student-loan borrowers will enter the new year still waiting to get their cheaper payments and debt relief approved

• Over 800,000 student-loan borrowers are waiting for their income-driven repayment plans to be processed.
• The Education Department said in a court filing that 170 borrowers on IDR were approved for relief in November.
• It leaves thousands of borrowers in repayment limbo as the department works through its backlog.

Thousands of student-loan borrowers are stuck in limbo.

President Donald Trump's Department of Education provided an update on the progress it has made in processing student-loan borrowers' income-driven repayment applications in a court filing last week. It seems the department still has a lot of work to do: 802,730 IDR applications are pending as of November 30.

Per the court filing, the department discharged the loans of 170 student-loan borrowers who were on IDR plans in November, with another 280 discharges for borrowers who had completed their payments through the Public Service Loan Forgiveness program, which forgives student debt for government and nonprofit workers after 10 years of qualifying payments.

The updates are a result of an agreement the Department of Education reached with the American Federation of Teachers, which accused the department in a lawsuit of delaying processing and denying borrowers the relief they're owed.

In October, the department also said in a court filing in the AFT lawsuit that it would process more forgiveness for borrowers on income-driven repayment plans, appearing to be a commitment to keep working through the backlog. The latest update leaves it uncertain as to how quickly the department intends to process applications and grant relief to borrowers who complete their qualifying number of payments.

Millions of student-loan borrowers face significant changes in 2026

Beginning in July 2026, the department is set to begin implementing major repayment changes that Trump signed into law in his "big beautiful" spending legislation. These include a new repayment plan, borrowing limits for graduate, professional, and parent loans, and changes to PSLF eligibility.

Tax changes are also coming. A 2021 provision in the American Rescue Plan that made student-loan forgiveness tax-free is set to expire in January, meaning that borrowers who reach their qualifying number of payments for relief in 2026 could face thousands of dollars in taxes. The department confirmed, however, that borrowers who reached their payment threshold before 2026 but did not yet have their discharge approved would not face taxes.

Student-loan borrowers told Business Insider that they're bracing for higher payments next year as a result of the slew of repayment changes, along with uncertainty as to how those changes will play out.

"My overall general feeling is anxiety and nervousness about it because we really don't know what's going to happen," Jennifer Oakes, a 41-year-old borrower, said.