With IDR applications unfrozen, borrowers can again apply for plans to lower student loan payments

IDR Applications Are Back Online, but Student Loan Forgiveness Remains in Limbo Here's what experts recommend for now

With IDR applications unfrozen, borrowers can again apply for plans to lower student loan payments

The Department of Education has reopened applications for income-driven repayment plans, offering a little relief to student loan borrowers who've been in limbo for the past month. IDR plans are student loan repayment programs that cap monthly payments based on a percentage of the borrower's income. It's been an alternative option for borrowers enrolled in the Saving on a Valuable Education plan, which has been on hold for months facing legal challenges.

The IDR application was removed from the federal student loan site shortly after an appeals court ruled against SAVE in February. It has since been made available again with revisions, the Department of Education announced Wednesday.

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While SAVE borrowers can explore other IDR plans, including income-contingent repayment and pay as you earn plans, the ruling against SAVE means that forgiveness at the end of the repayment period is still in limbo. However, experts still recommend borrowers explore IDR plans to potentially reduce their monthly payments.

The Trump administration has made it clear that it's opposed to student loan forgiveness programs. President Donald Trump announced plans to shut down the Department of Education and have the Small Business Administration "immediately" begin handling the entire federal student loan portfolio.

"We are still awaiting further decisions on what happens at the end of the repayment term for borrowers repaying under these plans," said Elaine Rubin, a CNET Money Expert Review Board member and advisor for Edvisors.

What does all of this mean for your student loans and repayment options? We talked to experts to find out.

What's happening with SAVE?

If you're panicked about the end of SAVE, it's understandable. Although SAVE has not yet been officially canceled, it's likely just a matter of time. Anyone enrolled in SAVE has had their loans placed in an administrative forbearance for the past eight months.

You won't have to worry about resuming payments until this forbearance has ended. The forbearance period for SAVE borrowers was expected to end at the close of 2025, but it seems likely that payments will resume sooner.

"Those enrolled in the SAVE plan should be paying careful attention to what's going to happen in the next few months, because at some point their loans will enter repayment," Rubin said.

What should SAVE borrowers do next?

Experts encourage SAVE borrowers to explore repayment options through other income-driven repayment plans. You can check your eligibility and expected monthly payment options using the loan simulator at StudentAid.gov. Other IDR plans currently offer monthly payments that are higher than SAVE, but likely lower than the standard repayment plan.

You may find you don't qualify for another IDR plan, however, even if you qualified for SAVE. CNET contributor Dana Miranda recently wrote about exploring her student loan repayment options. Without SAVE, she now expects her monthly student loan payment to jump from $0 to $488.

While your payments are paused, Rubin suggests taking steps to prepare. This might mean adjusting your budget or working with a financial counselor to assess your options. "You might be at a standstill, but there are other actions you can take to put yourself in a better financial position," Rubin said. "We've seen people who are putting their expected monthly payment amounts in a high-yield savings account, and others are paying off credit cards and car debts while they can contribute more money to those debts."

If you're facing financial difficulties, talk to your student loan servicer about deferment or forbearance options.

Should borrowers on other IDRs be worried?

Since other income-driven repayment plans like PAYE and ICR have been written into the law, Rubin says they're less likely to be dismantled completely. For now, Rubin says borrowers should continue making on-time payments.

What's less clear is how forgiveness through existing IDRs will shake out. Right now, income-driven repayment plans like PAYE and ICR both offer forgiveness for borrowers after they make 20 to 25 years of qualifying payments.

"Concerns have been raised about what happens at the end of the repayment terms for ICR and PAYE plans now that forgiveness has been blocked," Rubin said. "After 20 or 25 years of payments, there remains uncertainty about how the remaining balance will be managed in the long term."

If you're enrolled in any income-driven repayment plan and reach the end of your repayment term, Rubin said you'll be placed in an interest-free forbearance period until the court offers a final ruling on student loan forgiveness.

Is Public Service Loan Forgiveness still available?

The government's Public Service Loan Forgiveness Program — which can help teachers, nurses and other public servants get their loan balances forgiven after 10 years of payments — is still in effect. For those currently enrolled in PSLF, the plan appears safe for now. During her confirmation hearing for education secretary last month, Linda McMahon told senators that the Department of Education would honor the Public Student Loan Forgiveness Program because it was created by Congress.

However, for borrowers enrolled in SAVE who are working toward PSLF, debt relief could take longer. While your loans remain on hold during the administrative forbearance period, you won't receive on-time payment credit toward PSLF. This could stretch out your repayment timeline.

There's another wrinkle for federal employees: As the Trump administration takes aim at shrinking the size of the federal workforce, public workers who have been laid off may no longer qualify for PSLF. The plan does allow for participants to resume PSLF if they get another public service job.

Expert tip

If you have federal loans that are eligible for PSLF and you've worked in public service for 10 years or more, you may be eligible for forgiveness sooner through the PSLF buy-back program. Here's how it works.

Should you think about refinancing to a private plan?

If you're thinking about refinancing your federal student loans with a private lender, experts say to proceed with a high degree of caution. When you refinance your federal student loans with a private lender, you forfeit any perks federal loans offer, including forgiveness, debt relief, income-driven repayment options and administrative forbearances, like the SAVE payment pause.

"It's very rarely recommended," Rubin said. "If you're struggling in the federal market, the private market is likely going to present even more challenges. Just because you see low, appealing rates advertised, it doesn't mean you'll get that rate. We have seen buyers with good to excellent credit not get the kind of rates they expected."