On March 26, 2025, the Department of Education reopened the online application for Income-Driven Repayment (IDR) plans for federal student loan borrowers. Borrowers can now apply to enroll in, switch between, or update their income in IDR plans at studentaid.gov.
This follows a very stressful period for student loan borrowers. On February 21, the Department pulled down the IDR application. The Department said it was doing so in response to a recent court order in a lawsuit challenging the SAVE plan, but did not tell borrowers how long it would be down, what was changing, or what their options for managing their loans would be. This created widespread confusion and financial stress for people trying to sign up for IDR or keep their payment amounts affordable in IDR.
The online application is now back up, but there are some important changes that borrowers need to know about. Significantly, borrowers can no longer sign up for the SAVE plan on the online application. This blog post will cover what borrowers need to know now that the IDR application is back up, including:
Open Question: What will happen to borrowers who previously applied for SAVE or the plan with the lowest monthly payment and whose application wasn’t been processed?
What Borrowers Need to Know Now
Changes to the IDR Application
The online IDR application is now available to borrowers again. The paper/PDF application is not yet available as of March 27, but should be posted here (under “Loan Repayment”) when available.
The Department made changes to the IDR application. The biggest changes are to the plans the borrower can request:
- The IDR application no longer allows borrowers to sign up for the SAVE plan.
- The IDR application no longer allows borrowers to request to sign up for the IDR “plan with the lowest monthly payment.” Prior versions of the IDR application listed this option first and noted it was “Recommended.” This was a useful option to borrowers as it allowed them to enroll in IDR without having to worry about the details of each of the four IDR plans to figure out which plans they were eligible for and which plans would be best for them.
Open Questions:
As of March 28, 2025, the Department has not said what will happen if a borrower requests to sign up for a plan that they are not eligible for – in the past, the borrower would be enrolled in the most affordable plan the borrower is eligible for.
As of March 28, 2025, the Department has not said what will happen to borrowers who submitted IDR applications before the SAVE and “lowest monthly payment” options were removed. There is a huge backlog of applications requesting one of those two options that have not yet been processed. Right now, it is unknown how those applications will be handled and whether some borrowers will be forced to reapply.
As a result, borrowers must now choose between the following three IDR options when they sign up:
- Pay As You Earn (PAYE),
- Income-Based Repayment (IBR), and
- Income-Contingent Repayment (ICR).
PAYE, IBR, and ICR generally require borrowers to make higher payments than they would in the SAVE plan. But they might still be a better option than a standard or graduated plan for people struggling with the loan payments, and all three plans are PSLF qualifying. A few key differences between the plans are below:
- PAYE and IBR offer most borrowers lower payments than ICR.
- For people repaying debt for graduate school, PAYE offers a shorter timeline to forgiveness than IBR or ICR (20 vs 25 years).
- IBR is the only plan available to borrowers with older Federal Family Education Loans (FFEL).
- Although all three of these plans promise to forgive any remaining loan balances after 20 or 25 years of qualifying payments, the government is currently not providingforgiveness to borrowers in PAYE and ICR – only to borrowers in IBR.
- ICR is the only plan available to borrowers repaying Parent PLUS loans, and is only available if they consolidate those loans.
For more information about PAYE, IBR, and ICR, see here.
Additionally, borrowers who are married but file their taxes separately will now be subject to different rules about how their payments will be calculated in IDR, including whether they will need to provide their spouse’s income and whether their spouse will be included in their family size. These calculations will now be based on the rules as they existed before July 2023, instead of the rules used between July 2023 and February 2025.
Expect Delays in Processing Applications
While reopening the IDR application process is important, it’s only the first step. All pending and newly submitted applications still have to be processed and new payments calculated, and that could take a long time. The Department has said that applications are still not being processed as back-end changes are being made. When processing starts up again, there will be a big backlog of applications to work through – reportedly the backlog is already around 1 million unprocessed IDR applications. So borrowers should be prepared for long delays in processing their IDR applications.
What can borrowers do if they cannot afford their current student loan bills while waiting for their application to be processed?
- Contact their loan servicer and ask to be placed in a processing forbearance. The processing forbearance pauses their obligation to make payments and counts, for up to 60 days, toward PSLF. Some servicers may automatically place borrowers in this processing forbearance, but borrowers should be prepared to request it.
- After 60 days, borrowers will be put into a general forbearance if their application has still not been processed. The general forbearance will not count toward IDR or PLSF, but will continue to pause payments. Servicers should automatically place borrowers in this general forbearance if their processing forbearance ends before their application is processed. However, borrowers have reported that this has not happened consistently. Borrowers should watch their email and mail closely for communication from their servicer, and if they are sent a monthly bill before their IDR application has been processed, they should call their servicer and ask for a forbearance.
Borrowers may also be eligible for other deferments or forbearances that allow them to temporarily pause payments, and some count toward PSLF. Follow these links for more information about deferments and forbearances.
Annual Income Recertification Deadline Changes
The Department also announced that it would be changing income recertification deadlines for many borrowers to help address the problems caused by shutting down the IDR application and suspending processing.
One of the biggest problems with the Department’s decision to shut down the IDR application last month was that many borrowers received notices that they had to submit their annual income update (called “recertification”) to keep their payments from suddenly jumping by hundreds or even thousands of dollars, but they couldn’t submit this information. That’s because borrowers need to use the same IDR application that they used to enroll in an IDR plan to submit their new income and family size information each year, but the Department pulled down the applications and stopped processing all IDR application forms.
On March 26, the Department announced that it was pushing back recertification deadlines for most borrowers currently enrolled in PAYE, IBR, or ICR to no earlier than February 2026. The Department had already pushed back recertification deadlines for borrowers in SAVE to no sooner than February 2026.
A few caveats:
- The Department said servicers have begun pushing back recertification deadlines, but that it “will take time.” So some people may still be told incorrectly that they have to recertify this year.
- Borrowers who were due to recertify on or before February 20, 2025 (ie, before the IDR application was paused), and who did not submit their application to recertify by their due date, may have already had their monthly bills jump as a result. Borrowers in this situation should fill out the IDR application for returning borrowers as soon as possible now to have their payments recalculated and potentially lowered – but expect delays in processing.
- Borrowers who were due to recertify after February 20, 2025 and who couldn’t because the application was down may have unfairly had their monthly bills jump. The Department says its loan servicers are working to fix this now by returning these borrowers to the lower monthly payment amount they had before their recertification deadline. If this is not fixed for borrowers, or if they suffered other harm as a result of the error, borrowers should call their servicer and demand that they fix it.
Consolidation Application is Back Up – But Beware
The online consolidation application, which was also temporarily removed, is also back online as of March 26, 2025. This means borrowers can once again apply online to consolidate their loans – i.e., take out a new Direct Consolidation loan to pay off other federal student loans. Borrowers may want to consolidate to get out of default, to get access to ICR if they have Parent PLUS loans. (Read more about consolidation here.), or to change an older loan type (like a FFEL or Perkins loan) into a Direct Loan.
But borrowers should beware that the Department announced that it is interpreting a recent court order to, at least for now, block if from applying an important rule that preserved borrowers’ credit for time they had earned toward reaching forgiveness in IDR when they consolidate.
This means that if borrowers apply to consolidate their loans now, they risk losing credit for all of the qualifying time that counted towards IDR forgiveness, and their new consolidation loan will start with zero qualifying months.
For example, a borrower in PAYE who has an IDR qualifying payment count of 120 months (i.e., 10 years) on all of her loans would need to make 10 more years of qualifying payments to then have any remaining debt forgiven. But if that borrower consolidates now, her IDR qualifying payment count would be reset to 0, and she would have to make 20 more years of qualifying payments before she could have any remaining debt forgiven in PAYE.
For this reason, borrowers should check their IDR qualifying payment count on studentaid.gov before deciding whether to consolidate. When deciding whether to consolidate, knowing how much time toward reaching loan forgiveness the borrower stands to lose is important.
For more information about how to see the IDR qualifying payment count, and what it means, click here.
Note that consolidating should not impact PSLF qualifying time that a borrower has already earned, since a separate rule protects that time. However, there is a risk that if the IDR payment count resets this may also mess up a borrowers’ PSLF qualifying time.
Other Changes – And the Department’s Explanation
The Department said that it made changes to the IDR application because it is interpreting a February court order to temporarily block all of the changes to IDR that were included in a 2023 rule issued by the Department of Education, even though many of those changes weren’t challenged in the lawsuit.
This includes temporarily blocking the following reforms to IDR that were part of the 2023 rules:
- The SAVE plan
- Making it easier for borrowers to stay enrolled and to maintain affordable payments in IDR by automatically updating their enrollment each year if they provide consent
- Reducing default by automatically signing borrowers up for an IDR plan if they fall behind on standard payments (if they consent)
- Stopping the practice of forcing borrowers to restart the clock toward their 20/25-year forgiveness timeline at 0 when they consolidate their loans
- Counting more periods of deferment or forbearance towards IDR forgiveness
- Allowing defaulted borrowers to access the IBR plan
- Changes to how payments are calculated for borrowers who file their taxes as “Married filing separately”
In addition to blocking these changes, the Department’s announcement also suggests that it is interpreting the court order to temporarily block two additional, longstanding benefits of IDR:
- The promise that the government will cancel any remaining loan balance for borrowers in Pay As You Earn (PAYE) or Income-Contingent Repayment (ICR) after they have made 20 or 25 years of qualifying payments.
- Partial interest subsidies that help reduce runaway balance growth for borrowers in the PAYE and ICR plans.
For more background on the lawsuits challenging the SAVE plan that led to this mess, see here.