Student Loan Borrowers Could Wait 2 Years to Get Applications Approved

Newsweek

21-05-2025

Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
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Student loan borrowers might have to wait two years to get their repayment plan applications approved as the Department of Education deals with a massive income-driven repayment (IDR) plan backlog.
The Education Department previously disclosed that more than 1.98 million IDR applications were pending at the end of April. Only 79,000 requests had been approved or denied during that month.
If the Education Department continues to move at this rate, it would take more than two years to process all remaining applications, according to the Student Borrower Protection Center.
Why It Matters
President Donald Trump's new Education Department this year has so far caused many federal student loan borrowers to see their monthly payments for income-driven repayment programs climb from $500 to $5,000.
Roughly 43 million Americans have some sort of student loan debt, and the Education Department reports Americans collectively have $1.5 trillion in student debt nationwide.
US Secretary of Education Linda McMahon prepares to testify before a House Subcommittee on Labor, Health and Human Services, Education, and Related Agencies hearing on the budget for the Department of Education, on Capitol Hill...
US Secretary of Education Linda McMahon prepares to testify before a House Subcommittee on Labor, Health and Human Services, Education, and Related Agencies hearing on the budget for the Department of Education, on Capitol Hill in Washington, DC on May 21, 2025. More
BRENDAN SMIALOWSKI/AFP via Getty Images
What To Know
Around 2 million federal student loan borrowers are waiting in the backlog to see if their applications for more affordable repayment plans are approved, according to new data from the U.S. Department of Education.
In a May 15 court filing, the department showed the extent of how many borrowers are waiting to see if they can get a plan based on their discretionary income.
Online applications were reinstated in March by the Trump administration after originally being paused due to a court order blocking Biden's original SAVE (Saving on a Valuable Education) IDR plan.
The backlog could create further financial difficulties for borrowers, as nearly 10 million people could default on their loans within months, according to the department.
Many have come out against the backlog after Trump implemented several changes in the agency, but the current Department of Education blamed former president Joe Biden's administration, saying it "failed to process income-driven repayment applications for borrowers, artificially masking rising delinquency and default rates and promising illegal student loan forgiveness to win points with voters."
"The Trump Administration is actively working with federal student loan servicers and hopes to clear the Biden backlog over the next few months," a spokesperson said, as reported by CNBC.
As SAVE was being challenged by the courts, the Biden administration put all student loan borrowers enrolled in SAVE in interest-free forbearance.
During the first few months of Trump's second term, he cut roughly half of the Education Department's staff, which may have contributed to the backlog.
Newsweek reached out to the Department of Education for comment via email.
What People Are Saying
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "What was meant to make the student loan process more efficient has turned into a nightmare. Nearly two million borrowers who applied for income-driven repayment plans are effectively stuck in limbo while they wait to see if they'll be approved or denied. And with a renewed push to collect payments from borrowers, this backlog is only going to present more headaches for those affected. The hope, obviously, is a new administration can offer some quicker solution than the current procedure."
Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: "This affects millions of borrowers now back in repayment, many of whom applied for forgiveness or income-driven repayment caps just to keep their finances afloat. Without that relief, a big chunk of their paycheck could be taken to cover loans; money they need for rent, food, or other bills."
What Happens Next
If the Education Department continues to process applications at its current rate, it would take more than two years for all borrowers to get a decision, according to the Student Borrower Protection Center.
As those applications get delayed or stuck in the system, borrowers may be forced to make tough choices, Thompson said.
"Some could fall behind on credit cards or other debts. If this drags on, we could see a domino effect: more defaults, more financial strain, and more pressure on the broader economy... Time is of the essence. If this isn't resolved soon, the consequences could compound quickly."