“Congress designs these (plans) to ensure that borrowers pay off their loans, but the Biden administration has tried to force the taxpayers to take the bill,” Education Secretary Linda McMahon said in a July statementS
McMahon refers to the income payment plan, which was created by the Biden administration and was so generous on their conditions that the courts forced the department to put the plan on the ice by throwing much of the loan loan program.
The education department uses legal uncertainty about Save to justify the suspension of cancellation of ICR, Paye and Ibr.
IBR was created by Congress and is not legally challenged. But the department told the NPR in July that Save’s legality issues make it difficult to determine the eligibility of cancellation by IBR. As a result, many borrowers, who are likely to be eligible for cancellation, still have to make payments.
“For every borrower who makes a payment after they have received the right to forgive, the department will reimburse the overpayments when the disposal is resumed,” the department told the NPR in a statement this week. As for this, when it can be?
The department would not engage in a schedule: “Ibr the discards will resume as soon as the department manages to establish the correct number of payments.”
PSLF is given
The borrowers recorded in the forgiveness of the Public Services Loan (PSLF) have also faced delays. According to court records, by the end of last month, the department had a lag of nearly 75,000 applications for cancellation under the PSLF Buying Program. This allows borrowers with 10 years of verified public service to make qualification payments for months they have spent in wrestling or delay.
In its amendments, AFT says that from May to August the department received many more redemption applications than processed. Each month, “The department received an average of 9,902 new applications, but only processed an average of 3 604”.
In a statement, the deputy educated department Ellen Kest said that with the PSLF buying program, the Biden administration was to blame for “arming the legal plan for liberation from liability for political purposes. The department is working on this lag, while ensuring that the borrowers have submitted the necessary.
The processing of these redemption applications may take a long time, and the passage of the Trump administration to Cut the office of federal student’s employees in half He may have slowed his efforts.
On January 1, 2026, tax changes will not apply to the forgiveness of the public service loan.
Many borrowers are at risk of default
More than 7 million borrowers are recorded in savings and is not required to make payments, but the Trump administration Recently renewed interest accrual on these loans, looking at Press the borrowers In alternative plans.
But Court records show The inclusion of an alternative has been slow for months. In February, the department temporarily stopped accepting applications for all income -dependent repayment plans, and although more than a million were still hanging by the end of August.
The KEAST of the education department tells the NPR that this lag began during the previous administration and that the “Federal Student Loan is actively working and hopes to clear Biden’s lag over the next few months.”
Against the background of all this confusion and uncertainty, the data suggest many federal borrowers of a student loan fail to pay off their loansS
“One of three federal student borrowers of a student loan currently being paid are at some stage of crime,” says Daniel Mangrum, an economist of the New York Federal Reserve Bank.
The importance of millions of borrowers is already at a serious risk of default.
