Can 1.9 Million Borrowers Finally Get Their Student Loans Forgiven?
Nearly two million student loan borrowers finally have movement on their stalled applications. After months of delays, the Department of Education announced major updates that could speed up Income-Driven Repayment (IDR) processing and Public Service Loan Forgiveness (PSLF) requests.
Where We Are Now
Right now, 42.7 million Americans owe over $1.6 trillion in federal student loan debt. But nearly 1.9 million borrowers have been stuck, unable to access lower monthly payments or make progress toward forgiveness because their applications sat in limbo.
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The Department of Education confirmed that starting May 2025, servicers will restart processing IDR applications that have been frozen for over two months. Borrowers will finally see movement on lower payment plans and PSLF credit adjustments.
The first public status report will come out on May 15, 2025, tracking:
Pending IDR applications
Approved or denied IDR applications
Pending PSLF buyback requests
Processed PSLF buyback requests
Updates will follow every 30 days for at least three months, up to six months if needed.
This marks the first time borrowers will get real visibility into the government's processing speed and if the backlog is truly shrinking.
Why the Delays Hurt So Much
The stakes for borrowers are enormous. Every month an application goes unprocessed is another month borrowers:
Pay higher amounts than necessary
Miss credit toward 20- or 25-year IDR forgiveness timelines
Lose months toward the 120 qualifying payments for PSLF
Persis Yu, Deputy Executive Director of the Student Borrower Protection Center, put it plainly: "Every day these applications go unprocessed deprives borrowers of critical time toward IDR and PSLF relief and financial stability."
In financial terms, delays can cost borrowers thousands of dollars, and extend repayment timelines by years.
How We Got Here
Processing delays began under the Biden administration’s expansions of IDR and PSLF options. Although these expansions were intended to make forgiveness more accessible, lawsuits and internal Department of Education reshuffling caused major gridlock.
More than 5 million borrowers have not made a student loan payment in over 360 days. Another 4 million borrowers are between 91 and 180 days delinquent. If left unaddressed, nearly 10 million borrowers could be in default within a few months, meaning 25 percent of the federal student loan portfolio would be in default.
Legal challenges have made the situation more complex. Court battles, mainly from Republican-led states, blocked broad forgiveness initiatives. Meanwhile, administrative confusion left nearly 1.9 million borrowers waiting without any clear communication or next steps.
What Changes Are Coming?
Along with restarting processing, the Department announced several new improvements:
Enhanced IDR Enrollment: A faster application process that uses IRS data-sharing to automatically verify income, removing the need for annual recertifications.
Treasury Offset Resumption: Beginning May 5, 2025, the government will restart collections for borrowers in default, including wage garnishments and tax refund seizures.
Outreach Campaigns: Borrowers will receive email and social media reminders about repayment options, new tools like the Loan Simulator and AI Assistant (Aiden), and longer call center hours.
Support for Struggling Borrowers: Borrowers can enroll in IDR plans or rehabilitation programs to get out of default before more aggressive collections begin.
These steps aim to move borrowers back into repayment while offering manageable options for those facing financial hardship.
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The Bigger Picture
Student loan repayment issues have major ripple effects across the economy:
Homeownership: Student loan debt directly impacts mortgage eligibility, especially for younger borrowers.
Credit Health: Missed or late payments damage credit scores, limiting access to other types of credit.
Financial Planning: Ongoing uncertainty makes it hard for borrowers to save for retirement, invest, or make big financial decisions.
Restarting IDR processing and offering better tools for enrollment will not just help individual borrowers, it could improve broader economic health.
Important Dates to Watch
May 5, 2025: Default collections restart, including Treasury Offset and wage garnishments.
May 10, 2025: Loan servicers are expected to resume placing borrowers into IDR plans.
May 15, 2025: First public IDR processing report released.
Every 30 Days After: Additional progress reports will track how fast the backlog is being cleared.
Borrowers need to monitor these updates closely. Each report will show how many applications are being processed and whether the Department is meeting its targets.
Bottom Line
If you are one of the nearly 2 million borrowers impacted:
Stay Updated: Watch for Department of Education updates starting May 15.
Respond Quickly: If you receive communication about collections or repayment options, act immediately.
Consider IDR Plans: If you are eligible, enrolling can lower your monthly payments and help you stay on track for forgiveness.
Document Everything: Keep records of all communications with servicers and the Department of Education.
Seek Help If Needed: Nonprofits like the Student Borrower Protection Center can provide guidance.
Peter Dunn, CEO of Your Money Line, summarized the situation well: "Borrowers should brace for ongoing delays. Policy clarity may not come quickly... borrowers should stay informed, document their communications, and take advantage of any available protections or programs."
If the Department follows through, millions could finally access the relief they have been promised. If not, more legal battles could be on the horizon.
Either way, after years of uncertainty, borrowers will soon have more answers, and maybe, a path forward.
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Reference
U.S. Department of Education. (2025, April 21). U.S. Department of Education to begin federal student loan collections, other actions to help borrowers get back into repayment. Retrieved from https://www.ed.gov/about/news/press-release/us-department-of-education-begin-federal-student-loan-collections-other-actions-help-borrowers-get-back-repayment
Ziv, S. (2025, April 28). Major update for 1.9 million borrowers about student loan forgiveness and repayment processing. Retrieved from https://www.forbes.com/sites/shaharziv/2025/04/28/major-update-for-19-million-borrowers-about-student-loan-forgiveness-and-repayment-processing/?ctpv=xlrecirc
Delaware Online. (2025, April 24). Department of Education: Defaulted student loan repayments resume May 2025. Retrieved from https://www.delawareonline.com/story/news/2025/04/24/department-of-education-defaulted-student-loan-repayments-resume-may-2025/83246055007/
The New York Times. (2025, April 29). Student loans: Collections to restart as borrowers face renewed payments. Retrieved from https://www.nytimes.com/2025/04/29/business/student-loans-collections.html
