The Department of Education has recently taken down the online applications for income-driven repayment plans and loan consolidations following a US Court of Appeals ruling that halted the implementation of former President Joe Biden’s Saving on a Valuable Education plan (SAVE) and parts of other income-driven repayment plans.
The SAVE plan, which was designed to reduce monthly payments and expedite student loan forgiveness, was launched in 2023 but has been on hold since last July due to ongoing litigation. The lawsuit, filed by attorneys general from Missouri, Arkansas, Florida, Georgia, North Dakota, Ohio, and Oklahoma last April, challenged Biden's authority to implement the plan.
Approximately 8 million borrowers enrolled in SAVE plans have been placed in an interest-free forbearance period, during which they are not required to make monthly student loan payments.
Mark Kantrowitz, a student loan expert, highlighted that the Department of Education, now under the leadership of Education Secretary Linda McMahon, a Trump appointee, needs to reassess the income-driven repayment plan application forms in light of the court ruling. The Biden administration had previously removed the repayment plan forms from online platforms last year due to the ongoing legal challenges.
While President Donald Trump has not made specific commitments regarding student loans or college financial aid, student loan forgiveness is not a top policy priority for his administration, unlike it was for Biden.
The suspension of access to income-driven repayment plans could pose significant challenges for borrowers seeking more affordable options. Kantrowitz suggested that borrowers facing financial difficulties could explore options such as forbearance, deferment, or consider enrolling in graduated or extended repayment plans to potentially lower their monthly payments.
