Student loan borrowers in the US are facing frustrating delays in accessing repayment plans as a backlog from the Trump administration era continues to grow. More than 1 million applications for income-driven repayment (IDR) plans remain unprocessed, while a government shutdown has brought much of the Education Department’s work to a halt.
The backlog means borrowers cannot switch to new repayment options, leaving many stuck paying rising interest and unable to make progress on loan forgiveness programs. The situation shows no signs of improving anytime soon.
Backlog swelling amid government shutdown
According to court records cited by CNBC, as of August 31, 1,076,266 IDR plan applications were pending with the Education Department. A spokesperson for the department told CNBC that during the US government shutdown , Federal Student Aid staff “will not be able to perform regular operations, including working on the IDR backlog.”
This shutdown began after lawmakers failed to reach a funding agreement, resulting in most federal workers at the Education Department being put on unpaid leave. The pause in processing leaves borrowers in limbo, unable to access the affordable repayment plans Congress mandated.
Mark Kantrowitz, a higher education expert quoted by CNBC, said it is “not surprising that there will be no progress on the IDR backlog during the shutdown, as the staff who work on it aren’t considered ‘essential.’” He added that this failure “is disruptive to the lives of borrowers.”
Interest is accruing despite the wait
Many borrowers in the backlog had hoped to switch from the Biden-era SAVE plan, designed to cap monthly payments based on income and provide eventual debt cancellation. However, a court struck down the SAVE plan in February. Borrowers who remain in SAVE forbearance are now seeing interest accumulate on their loans.
“The Trump administration started charging interest as of August 1,” Kantrowitz told CNBC. Meanwhile, borrowers stuck waiting cannot switch to another plan, leaving them vulnerable to growing debt balances.
The delays also affect borrowers aiming for Public Service Loan Forgiveness (PSLF), a program offering loan cancellation after ten years of qualifying payments. Because applications remain unprocessed, progress towards forgiveness under both IDR and PSLF programs is stalled.
What borrowers can do while waiting
For now, Kantrowitz advises borrowers caught in the backlog to save the money they would normally use for payments. This strategy prepares them for the first bill once their application is finally approved and they enter a new repayment plan.
“While this waiting period likely doesn’t count toward IDR or PSLF forgiveness,” he noted to CNBC, “when you first applied for an IDR plan, you were supposed to be put into a 60-day administrative forbearance, which still counts toward your forgiveness timeline.”
Carolina Rodriguez, director of the Education Debt Consumer Assistance Program, told CNBC borrowers should “maintain thorough records and monitor any applications submitted during this period.” She emphasised that “once processing resumes, it’s important to follow up promptly to ensure their application remains on track.”
Unfortunately, she said, “this remains a waiting game” until government operations restart.
Congressional intent and historical context
Congress created income-driven repayment plans in the 1990s to help borrowers afford their loans. These plans cap monthly payments based on discretionary income and provide debt cancellation after 20 or 25 years.
The backlog and shutdown mean millions of borrowers are unable to access the protections Congress intended. The Trump administration’s role in starting to charge interest again and the government shutdown have combined to create significant obstacles.
Until federal operations resume, student loan borrowers face ongoing uncertainty, with millions waiting for the Education Department to catch up on its workload.
The backlog means borrowers cannot switch to new repayment options, leaving many stuck paying rising interest and unable to make progress on loan forgiveness programs. The situation shows no signs of improving anytime soon.
Backlog swelling amid government shutdown
According to court records cited by CNBC, as of August 31, 1,076,266 IDR plan applications were pending with the Education Department. A spokesperson for the department told CNBC that during the US government shutdown , Federal Student Aid staff “will not be able to perform regular operations, including working on the IDR backlog.”
This shutdown began after lawmakers failed to reach a funding agreement, resulting in most federal workers at the Education Department being put on unpaid leave. The pause in processing leaves borrowers in limbo, unable to access the affordable repayment plans Congress mandated.
Mark Kantrowitz, a higher education expert quoted by CNBC, said it is “not surprising that there will be no progress on the IDR backlog during the shutdown, as the staff who work on it aren’t considered ‘essential.’” He added that this failure “is disruptive to the lives of borrowers.”
Interest is accruing despite the wait
Many borrowers in the backlog had hoped to switch from the Biden-era SAVE plan, designed to cap monthly payments based on income and provide eventual debt cancellation. However, a court struck down the SAVE plan in February. Borrowers who remain in SAVE forbearance are now seeing interest accumulate on their loans.
“The Trump administration started charging interest as of August 1,” Kantrowitz told CNBC. Meanwhile, borrowers stuck waiting cannot switch to another plan, leaving them vulnerable to growing debt balances.
The delays also affect borrowers aiming for Public Service Loan Forgiveness (PSLF), a program offering loan cancellation after ten years of qualifying payments. Because applications remain unprocessed, progress towards forgiveness under both IDR and PSLF programs is stalled.
What borrowers can do while waiting
For now, Kantrowitz advises borrowers caught in the backlog to save the money they would normally use for payments. This strategy prepares them for the first bill once their application is finally approved and they enter a new repayment plan.
“While this waiting period likely doesn’t count toward IDR or PSLF forgiveness,” he noted to CNBC, “when you first applied for an IDR plan, you were supposed to be put into a 60-day administrative forbearance, which still counts toward your forgiveness timeline.”
Carolina Rodriguez, director of the Education Debt Consumer Assistance Program, told CNBC borrowers should “maintain thorough records and monitor any applications submitted during this period.” She emphasised that “once processing resumes, it’s important to follow up promptly to ensure their application remains on track.”
Unfortunately, she said, “this remains a waiting game” until government operations restart.
Congressional intent and historical context
Congress created income-driven repayment plans in the 1990s to help borrowers afford their loans. These plans cap monthly payments based on discretionary income and provide debt cancellation after 20 or 25 years.
The backlog and shutdown mean millions of borrowers are unable to access the protections Congress intended. The Trump administration’s role in starting to charge interest again and the government shutdown have combined to create significant obstacles.
Until federal operations resume, student loan borrowers face ongoing uncertainty, with millions waiting for the Education Department to catch up on its workload.
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