Workers leave the Department of Education building during a rain shower in Washington, D.C., on Wednesday, May 21, 2025.
Wesley Lapointe | The Washington Post | Getty Images
Recent changes to the federal student loan system have left many borrowers with fewer repayment options. But even one of the remaining plans — known as the Income-Based Repayment plan, or IBR — is proving hard to access.
“Applications are being rejected without clear or logical explanations,” said Carolina Rodriguez, director of the Education Debt Consumer Assistance Program. Rodriguez and her team members work with clients with student loans.
“These ongoing delays continue to erode public trust in the student loan system and are likely to worsen the delinquency and default rates we’re already seeing,” Rodriguez said.
IBR will be one of only a few repayment options left to many borrowers after recent court actions and the passage by Congress of President Donald Trump’s “big beautiful bill.” That legislation phases out several existing student loan repayment plans.
Here’s what student loan borrowers need to know about the challenges with IBR.
IBR debt forgiveness is still frozen
Over the summer, the U.S. Department of Education announced that it would temporarily stop forgiving the debt of borrowers enrolled in IBR. According to the plan’s terms, IBR concludes in debt erasure after 20 years or 25 years of payments, depending on the age of a borrower’s loans.
The Education Department told CNBC in July that it paused loan forgiveness under IBR while it responds to recent court actions involving the Biden administration-era SAVE, or Saving on a Valuable Education, plan.
The department said that the 8th U.S. Circuit Court of Appeals decision in February, which blocked the SAVE plan, had other impacts on student loan repayment. For example, under the rule involving SAVE, certain periods during which borrowers postponed their payments would count toward their forgiveness timeline. With SAVE blocked now, borrowers no longer get credit during those forbearances.
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“The Department has temporarily paused discharges for IBR borrowers in order to correctly count loan forgiveness amounts under a court injunction regarding the Biden Administration’s illegal SAVE repayment plan,” said Ellen Keast, deputy press secretary at the Education Department.
“For any borrower that makes a payment after they became eligible for forgiveness, the Department will refund overpayments when the discharges resume,” Keast said.
Earlier this month, the department wrote on its website that the system changes to IBR could take until “winter 2025.”
“More than enough time has passed for the Department to fix whatever issues were supposedly affecting IBR forgiveness,” said higher education expert Mark Kantrowitz. “That suggests the holdup is intentional.”
The pause puts many student loan borrowers who’ve been in repayment for decades and are now eligible for forgiveness in an especially frustrating bind, Kantrowitz said. IBR is the only income-driven repayment plan still available that leads to loan erasure, he said.
Wrongful IBR denials
When lawmakers phased out several student loan repayment plans over the summer in the One Big Beautiful Bill Act, they made a change to IBR aimed at expanding people’s eligibility for the program. Experts say that’s likely because many borrowers would need access to the plan after the other options became defunct or are set to expire.
The change eliminated the former requirement that borrowers prove a partial financial hardship to qualify for IBR. In the past, borrowers needed to show, based on their income, that their monthly IBR payment would be less than their bill on the department’s standard plan.
However, “borrowers are still being rejected due to their income,” said Elaine Rubin, director of corporate communications at Edvisors.
Kantrowitz said the same: “I’ve heard that some borrowers were denied IBR even though the change was supposed to be effective upon enactment on July 4, 2025.”
There are similar accounts in the American Federation of Teacher’s lawsuit against the U.S. Department of Education. The union, which represents some 2 million members, has said the Trump administration is depriving borrowers of their rights.
One plaintiff, who owes approximately $252,659 in federal student loan debt, has been paying for over 25 years, according to a September court filing in the AFT legal challenge. The woman applied for IBR in July but said that she was denied in August “on the grounds that she does not have a ‘partial financial hardship,’ which has not been a requirement for the IBR plan since the enactment of the One Big Beautiful Bill Act,” the AFT said.
“The Department therefore improperly denied her access to a payment plan for which she is eligible and is withholding loan cancellation,” the union said.
