Student Loan Repayment Applications Are Messing Up, Just As Major Changes Arrive

Key Points:

• Student loan borrowers are experiencing increasing problems and inaccuracies with the online application system for income-driven repayment (IDR) plans, which offer affordable payments based on income and family size.
• Issues include failure to display all eligible repayment plans (notably PAYE), inaccurate monthly payment information, and inappropriate encouragement to consolidate loans, which can harm borrowers’ eligibility for forgiveness and repayment options.
• These application problems coincide with the Education Department's July 1 rollout of major student loan program changes, including ending the SAVE plan and launching the new Repayment Assistance Plan (RAP), requiring millions to reapply for repayment plans amid a significant backlog.
• Advocacy groups and the Government Accountability Office warn that staff reductions and diminished oversight at the Education Department have worsened servicing problems, risking delays, inaccurate records, and poor borrower support during this critical transition period.
• With over 530,000 IDR applications already unprocessed, watchdogs fear the backlog will balloon, potentially leaving millions of borrowers waiting years for relief and pushing the federal student loan system toward collapse.