IDR applicants can either be late applicants or first-time borrowers because filing IDR applications has faced delays due to application processing backlogs. As such, affected borrowers cannot lower their monthly payments or get any movement on their road to forgiveness till the Department of Education resumes processing.
Delays have seriously disrupted things. Existing borrowers should have had their loans forgiven; in the meantime, these applications were put to rest. There have also been delays for those with qualifying months of payment under the PSLF program, which further administers the forgiveness. “Every day these applications go unprocessed deprives borrowers of critical time toward IDR and PSLF relief and financial stability,” said Persis Yu, deputy executive director at the Student Borrower Protection Center.
With each pause in processing, applicants get deprived of credit for the required 120 PSLF payments or in that 20-25 time frame for forgiveness under the IDR. As interest piles on, increasing the uncertainty, many are either paying higher amounts than necessary or are stuck in forbearance with no clear road ahead.
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The next step: IDR status reporting begins in may
Help may soon come. May 15 is when borrowers will really need to mark on their calendars, as the first Department of Education status report on IDR will be released, covering the period of processing activities in April.
The monthly status of IDR reports is an indication of fewer backlogs and faster processing of applications.
Tracking the IDR status reports will serve as a major cue for borrowers for the health of the restoration of the student loan system, since shrinking backlogs mean relief is getting nearby.
Administrative changes for IDR enrollment will curb even future backlogs
In addition to the status reports, the Education Department publicly unveiled plans to overhaul the IDR process. “Launching an enhanced Income-Driven Repayment process,” officials indicated, which eliminates annual recertification of income for the borrowers, would mean fast enrollment.
With strengthened IRS data sharing, the changes seem feasible. Should this be successful, this reform could offer significant reductions in processing time and prevent the occurrence of another application backlog of this magnitude. Fast, easy IDR access would thus quickly place affordable payments in the hands of the borrowers while protecting the heart of a functioning repayment system.
Ongoing legal pressure to ensure progress
Borrowers must know that groups and organizations are watching closely. Pressure induced once upon the AFT and the SBPC to push the Department to remedy the backlog will keep the watches flowing on the current situation through the information-sharing agreement. “Legal pressure is coupled with uncertainty as to what will be next if the Department of Education fails to live up to its commitments. On the other hand, if things keep moving forward, perhaps borrowers will soon see their forgiveness timelines reinstated, IDR plans approved, and payment counts updated — long overdue good news for 1.9 million borrowers who have waited far too long.”
