Borrowers looking to apply for an Income-Driven Repayment (IDR) plan or consolidate their federal student loans are facing an unexpected roadblock. Following a court injunction tied to the broader regulations governing the SAVE plan, applications for IDR and loan consolidation have been temporarily halted on StudentAid.gov.

Borrowers this week received the following message posted on StudentAid.gov when attempting to change repayment plans or process a loan consolidation application:

This pause, which could last at least 45 days (per the language written in the injunction), leaves borrowers uncertain about how their repayment plans will be processed. While paper applications remain an option, the delay could complicate planning for those trying to secure lower monthly payments or prepare for loan forgiveness.

Why Are Applications Unavailable? 

The issue stems from an ongoing legal battle over the Biden administration’s changes to student loan repayment regulations that created the SAVE plan. The court ruling blocked the SAVE plan’s implementation, but the recent injunction was expanded to cover the entire set of regulations, affecting IDR applications and loan consolidation.

This paused happened previously when the court first blocked the SAVE plan, but the Department of Education was able to process non-impacted repayment plans after a short delay. However, now that more repayment plans are impacted, the Department of Education has once again paused processing. 

It’s notable that the Department of Education has not put out any statements regarding the pause yet.

For borrowers, this means:

• Online applications for IDR plans are temporarily unavailable.
• Online student loan consolidation applications are also suspended.
• Pending applications may not be processed until the injunction is lifted.

While legal challenges have primarily focused on the SAVE plan, this broader injunction affects multiple aspects of loan repayment. 

What Borrowers Can Do Now

Despite the online application freeze, borrowers still have options:

1. Submit a Paper Application

Federal loan servicers are still accepting paper applications for IDR plans and loan consolidation. Borrowers can download forms from the Federal Student Aid website and submit them through their servicer’s document portal.

2. Monitor Pending Applications

If you submitted an IDR or consolidation application before the ruling, it’s likely paused unless it was processed by Thursday, February 20, 2024. Borrowers in this situation should stay in contact with their loan servicer to check on processing status.

3. Temporary Forbearance

Borrowers facing financial hardship while waiting for their IDR application to be processed should be eligible for an administrative forbearance. This would temporarily pause payments without impacting credit scores while your application is in process or limbo.

4. Watch for Updates on Loan Repayment Rules

Borrowers need to continue to watch for updates on repayment plan rules. They should also make sure their contact information is updated so they don’t miss any repayment restarts or recertification deadlines. This recently happened to thousands of student loan borrowers, seriously impacting their credit.

At some point in the future, these applications will reopen online, but until then, borrowers simply need to plan and prepare.

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