Department of Education Halts Applications for Student Loan Repayment Plans After Court Ruling

The Department of Education under the Trump administation has stopped accepting applications for certain income-driven repayment (IDR) plans after a federal court ruling blocked Biden’s SAVE Plan, along with parts of other repayment options.

This means borrowers may see higher monthly payments, and those who had pending applications will no longer have them processed.

On February 18, the 8th Circuit U.S. Court of Appeals issued an injunction preventing the Department of Education from implementing:

• The SAVE Plan – Biden’s initiative to cut student loan payments from 10% to 5% of a borrower’s income
• Income-Contingent Repayment (ICR) and Pay As You Earn (PAYE) plans

The SAVE Plan, introduced in August 2023, was a major effort by President Joe Biden to reduce the financial burden of student loans. However, with this new ruling, those savings are now on hold.

How Does This Impact Borrowers?

• Higher Loan Payments: If you’re enrolled in one of these plans, expect to pay more per month than originally planned.
• Application Freeze: If you were in the process of applying, your request will not be reviewed or processed.
• Uncertainty for the Future: It’s unclear whether the Department of Education will appeal or modify repayment plans in response.