Student loan repayment backlog leaves 2 million borrowers in limbo

[UNITED STATES] Almost 2 million federal student loan borrowers seeking affordable repayment options are stuck in limbo as their applications await review, according to recent data disclosed by the U.S. Department of Education.

The figures were made public in a court filing on May 15, submitted in response to a lawsuit from the American Federation of Teachers (AFT). The union sued the Trump administration in March after it shut down access to income-driven repayment (IDR) plan applications on the Department’s website.

The backlog comes at a critical time, with many borrowers grappling with rising living costs and flat wages. As loan payments resume following a multi-year pause due to the pandemic, financial pressure has intensified, making access to manageable repayment plans all the more urgent. Advocacy groups warn that delays in processing IDR applications could deepen debt burdens for vulnerable borrowers.

IDR plans are designed to tie monthly payments to a borrower’s discretionary income, helping to keep payments within reach. In late March, the Trump administration reinstated access to the online IDR applications, explaining that the forms had been pulled to ensure compliance with a court ruling that blocked President Biden’s new repayment initiative—the SAVE (Saving on a Valuable Education) plan.

The SAVE plan, introduced by the Biden administration, aimed to reduce monthly payments more significantly than previous IDR plans and shorten the path to loan forgiveness for many borrowers. But its implementation was put on hold amid legal challenges led by Republican officials, who argue the program exceeds executive authority. As a result, many borrowers are now uncertain whether to wait for SAVE’s potential return or switch plans amid a growing application logjam.

Trump administration officials contend that the court ruling affected all IDR programs, leading to the removal of forgiveness components in certain plans. The backlog further complicates the situation as the administration restarts collection efforts. The Education Department warns that up to 10 million borrowers could enter default in the coming months.

Without access to affordable repayment options, many borrowers risk falling behind, stalling their progress toward loan forgiveness, and becoming subject to collection actions. Experts caution that the consequences could extend well beyond short-term financial stress—missed payments or defaults during this period could harm credit scores and add years to already lengthy repayment timelines.

A Logjam That’s Sparking Outrage

As of the end of April, over 1.98 million IDR applications were still awaiting action, with only about 79,000 processed that month, the Education Department reported in its court filing.

Consumer advocates sharply criticized the figures. “This filing confirms what borrowers have known for months: Their applications for loan relief have effectively been going into a void,” said Winston Berkman-Breen, legal director at the Student Borrower Protection Center.

The Center estimated that, at the current pace, it would take more than two years to clear the existing backlog. AFT President Randi Weingarten denounced the situation as “outrageous and unacceptable.”

“This is the opposite of government efficiency,” Weingarten said. “Millions of borrowers are being denied their legal right to an affordable repayment option.”

Finger-Pointing Over the Delays

A spokesperson for the Education Department placed blame on the Biden administration, alleging it failed to process IDR applications and falsely suppressed delinquency data while promoting unlawful loan forgiveness efforts for political gain.

The statement underscores the ongoing partisan battle over student debt relief—a flashpoint issue heading into the 2024 election. While the Biden administration has advocated for broader forgiveness and more flexible repayment structures, Republican leaders and the courts have pushed back, arguing that such sweeping changes require congressional approval. The resulting policy whiplash has left both borrowers and loan servicers struggling to keep up.

“The Trump administration is actively working with federal servicers and aims to clear the Biden backlog in the coming months,” the spokesperson added.

Meanwhile, borrowers enrolled in the SAVE plan were placed into an interest-free forbearance period as legal challenges played out. Many of the current pending applications are believed to come from borrowers seeking to exit the frozen program and enroll in an available alternative.

Sarah Sattlemeyer, a project director at New America and former advisor under the Biden administration, noted that the backlog stretches across both administrations and stems from the broader legal fight surrounding SAVE.

“It shows how complex the loan system is and how much uncertainty has surrounded it over the last few years,” Sattlemeyer said. “There’s also a lack of clarity on how to handle certain applications—especially when a borrower selected a plan that no longer exists.”

Staff Cuts Likely Contributing to Delays

Adding to the problem, the Trump administration has recently laid off around half of the Education Department’s staff, including many who directly assisted borrowers.

That move may be contributing to the delays, said higher education expert Mark Kantrowitz. “Perhaps the reduction in staff is affecting their ability to process the forms,” Kantrowitz said.