“The Congress has designed these (plans) to ensure that the borrowers reimburse their loans, but the Biden administration has tried to illegally force the taxpayers to pay the bill,” said education secretary Linda McMahon in a July press release.
McMahon refers to the income -focused reimbursement plan, which was created by the Biden administration and was so generous under its conditions that the courts forced the ministry to put the plan on the ice, throwing a large part of the loan program in the confusion.
The Department of Education used legal uncertainty around SAT to justify the cancellation of the judgment under the ICR, the pay and the IBR.
IBR was created by Congress and is not legally challenged. But the department told NPR in July that the questions about Save’s legality had made it difficult to determinate the eligibility for cancellation under the IBR. Consequently, many borrowers who are probably eligible for cancellation must always make payments.
“For any borrower who makes a payment after having been eligible for forgiveness, the ministry will reimburse the overpayments when the releases resume,” the department said in a statement this week. When could it be?
The ministry would not engage in a calendar: “IBR discharges will resume as soon as the ministry is able to establish the right number of payments.”
PSLF Troubles
The borrowers registered with the forgiveness of the public loan (PSLF) also encountered delays. According to the judicial archives, by the end of last month, the ministry had an backlog of nearly 75,000 requests for cancellation as part of the PSLF’s “buyout” program. This allows borrowers of 10 years of public service verified to make eligible payments for months that they have spent on broadcast or postponement.
In its modified pursuit, said the rear, from May to August, the department received many more requests for buyout it has processed. Each month, “the ministry received an average of 9,902 new requests, but only processed an average of 3,604”.
In a statement, assistant press secretary of the Ministry of Education, Ellen Keast, said, with the PSLF’s “redemption” program, the Biden administration was guilty of “the armament of a legal discharge plan for political purposes. The ministry is making its way through this backwards while ensuring that the borrowers submitted the 120 required payments of the eligible employment ”.
The processing of these repurchase requests can take time, and the Trump administration’s decision to reduce the Federal Student Aid staff by halves may have slowed down their efforts.
On January 1, 2026, tax changes will not apply to the forgiveness of the loan of public service.
Many borrowers risk defaults
More than 7 million borrowers are registered with a safeguard and have not been required to pay payments, but the Trump administration recently resumed the accumulation of interests on these loans, seeking to push borrowers in other plans.
But judicial files show that registration for an alternative has been slow for months. In February, the ministry temporarily ceased to accept the requests for all reimbursement plans depending on income, and although it took over, more than a million were still pending at the end of August.
The Keast Education Department says at NPR this Surveé de Stallog in the previous administration, and that the ministry “works actively with federal student loan agents and hopes to erase the back of Biden in the coming months.”
In the midst of all this confusion and this uncertainty, the data suggest that many borrowers of federal student loans do not reimburse their loans.
“A federal borrower on in three federal student loans who is in reimbursement at the moment is a certain phase of delinquency,” explains Daniel Mangrum, research economist at the Federal Reserve Bank in New York.
This means that millions of borrowers are now likely.
