The Trump administration has unexpectedly removed the online application portal for several student loan repayment programs, raising concerns among borrowers and experts alike.
The decision, which was made without prior notice, affects those enrolled in income-driven repayment (IDR) plans, leaving millions uncertain about how to submit their required annual income certification.
The move follows a recent federal appeals court ruling that upheld a pause on President Biden’s SAVE program, which aimed to provide more accessible debt relief.
However, the administration’s decision appears to go beyond the scope of the ruling, blocking access to other repayment options that were not part of the legal dispute. Experts warn this could lead to financial disruptions for many borrowers.
Federal Court Ruling Leads to Unexpected Closure of Application Portal
On Friday, the Department of Education quietly took down the online application for loan consolidation and income-driven repayment (IDR) plans, according to a statement on StudentAid.gov. The statement attributes the decision to a federal court injunction, which halted Biden’s Saving on a Valuable Education (SAVE) plan and other IDR programs.
However, legal and student loan experts argue that the court ruling did not require the removal of access to longstanding repayment plans, such as Income-Based Repayment (IBR). “Nothing in this court order should affect income-based repayment,” said Mike Pierce, co-founder of the Student Borrower Protection Center, according to Yahoo Finance.
This unexpected change has created uncertainty for millions of borrowers, particularly those already enrolled in IDR plans.
These plans cap monthly payments at a percentage of a borrower’s income and offer loan forgiveness after a set number of years. Normally, enrollees must recertify their incomes annually to maintain eligibility, but with the online portal down, it remains unclear how borrowers can comply with this requirement.
Concerns Over Impact on Borrowers and Lack of Government Communication
Experts worry that the removal of the online application may lead to financial instability for borrowers who rely on IDR plans to keep their loan payments affordable. Failure to recertify income on time could result in increased monthly payments or capitalization of interest, significantly raising overall loan costs.
Currently, borrowers who had enrolled in SAVE before the court injunction have been placed in forbearance until 2025. However, the 4.5 million borrowers in other IDR programs do not have the same extension, raising concerns about missed deadlines and potential penalties.
“Some of those borrowers have recertification deadlines this month or next month,” said Abby Shafroth, director of the National Consumer Law Center’s Student Loan Borrower Assistance Project, according to Yahoo Finance.
With no official guidance from the Department of Education, affected borrowers have turned to online forums for advice, with some suggesting submitting paper applications directly to loan servicers.
