Hangin' on with Student Loans: The Monthly Update
In April, the Education Department handled just 4% of pending income-driven repayment application submissions related to student loans, with additional relevant news also surfacing.
Vibe check: This article is all about the latest happenings, problems, and, well, struggles with federal student loans in the United States. So, brace yourself as we delve deep into the nitty-gritty of the repayment scene.
Let's start with the much-anticipated return of the income-driven repayment (IDR) plans and the Public Service Loan Forgiveness (PSLF) buyback program. But, a word of caution—it's a slow start, and you might be in for some delays. As of April, just 4% of IDR applications were processed, according to the Department of Education (ED). Yeah, that's right, they're still working on over 2 million applications!
So, borrowers, if you're in line, keep paying your regular payments to your current servicers. For those on the soon-to-end SAVE plan, it's time to consider applying for a new IDR plan to get ahead in that line.
By the way, if you're curious, the interest rates for new federal student loans disbursed in the 2025-26 award year will see a slight 0.63 percent decrease.
Moving on, the department sentout collections notices to nearly 200,000 of the 5.3 million federal student loan borrowers in default this month. So don't ignore your loans—you might want to reachout to the Default Resolution Group to rescue yourself from the clutches of involuntary collections.
The ED is geared up and ready to assist borrowers currently in default by increasing its customer service capacity andextending call center hours. So,whether you're struggling to make payments or lost track of your loans, it's a good time to reach out to your servicer or a student loan counselor for a lifeline.
And for all the folks who've been scratching their heads about the PSLF Buyback program's eligibility, there's some newfound clarity. The report states that only the Teacher Loan Forgiveness forbearance program is ineligible. But hey, the time between applying to the program and receiving a response is eligible as long as it doesn't exceed 60 days.
The ED also confirmed that CARES Act forbearance is not eligible for buyback because it counted towards PSLF eligibility automatically.
Stay tuned for more updates on this student loan rollercoaster ride! If you're looking for more comprehensive insights, check out the student loans news hub to keep your balance and wallet safe.
- For those seeking advice on managing their personal-finance, especially regarding student loans, the education-and-self-development phase of the student loans news hub offers comprehensive insights to ensure a balanced wallet.
- If you're one of the many borrowers awaiting processing of student loans applications, such as the Income-Driven Repayment (IDR) plans or the Public Service Loan Forgiveness (PSLF) buyback program, it's crucial to closely monitor your loan finance status and make regular payments to avoid further complications in your personal-finance situations.
