March 28, 2025 Story by: Editor
The U.S. Department of Education has reopened online applications for income-driven repayment (IDR) plans, which help millions of federal student loan borrowers manage their debt.
According to the Trump administration, the available IDR plans include Income-Based Repayment, Pay As You Earn, and Income-Contingent Repayment.
Earlier this year, the administration removed online applications for these plans, drawing criticism from borrowers and consumer advocates. At the time, the Education Department cited a court ruling from February as the reason for the decision. The appeals court had blocked the Biden administration’s new IDR plan, known as SAVE (Saving on a Valuable Education).
However, the American Federation of Teachers recently filed a lawsuit against the Trump administration, arguing that it had misinterpreted the ruling from the 8th U.S. Circuit Court of Appeals by halting applications for all IDR plans beyond SAVE.
Congress first introduced income-driven repayment plans in the 1990s to make student loan payments more manageable. These plans cap borrowers’ monthly payments based on their discretionary income and forgive any remaining debt after 20 to 25 years. Many borrowers enroll not only for lower monthly payments but also to qualify for loan forgiveness under various programs.
As of September 2024, more than 12 million borrowers were enrolled in IDR plans, according to higher education expert Mark Kantrowitz.
Source: CNBC
