800,000 Student Loan Borrowers Face Processing Delays

Over 800,000 student-loan borrowers are currently waiting for their income-driven repayment (IDR) applications to be processed. The Department of Education provided this update in a recent court filing, revealing that 802,730 IDR applications were pending as of November 30.

Borrowers are left in repayment limbo as the department works through its backlog. While the department discharged loans for 170 IDR borrowers and 280 Public Service Loan Forgiveness recipients in November, the volume of pending applications indicates a significant delay in providing relief.

The Department of Education has acknowledged a substantial backlog in processing income-driven repayment applications. According to court documents, the department is currently handling a caseload of over 800,000 pending applications.

In November alone, the department approved relief for 170 borrowers on IDR plans. Additionally, 280 discharges were processed for borrowers who had completed their payments through the Public Service Loan Forgiveness (PSLF) program. PSLF forgives student debt for government and nonprofit workers after 10 years of qualifying payments.

The current updates are the result of an agreement reached between the Department of Education and the American Federation of Teachers (AFT). The union had filed a lawsuit accusing the department of delaying processing and denying borrowers the relief they were owed.

In October, the department stated in a court filing that it would process more forgiveness for borrowers on income-driven repayment plans. This appeared to be a commitment to address the backlog, though the latest figures suggest the process is moving slowly.

The lawsuit filed by the American Federation of Teachers has brought attention to the delays borrowers are facing. The union argued that the department was failing to process applications in a timely manner, leaving borrowers stuck in administrative purgatory.

Despite the department's commitment to working through the backlog, the latest update leaves the timeline for processing applications uncertain. It remains unclear how quickly the department intends to process applications and grant relief to borrowers who have completed their qualifying number of payments.

Borrowers are expressing concern over the lack of clarity. One borrower, Jennifer Oakes, 41, shared her sentiment regarding the ongoing uncertainty.

"My overall general feeling is anxiety and nervousness about it because we really don't know what's going to happen," Oakes said.

Millions of student-loan borrowers are facing significant changes beginning in July 2026. The Department of Education is set to implement major repayment changes signed into law by President Donald Trump in his spending legislation.

These upcoming changes include:

• A new repayment plan
• Borrowing limits for graduate, professional, and parent loans
• Changes to Public Service Loan Forgiveness (PSLF) eligibility

In addition to repayment changes, significant tax implications are approaching. A 2021 provision in the American Rescue Plan that made student-loan forgiveness tax-free is set to expire in January 2026.

This expiration means that borrowers who reach their qualifying number of payments for relief in 2026 could face thousands of dollars in taxes. However, the department confirmed that borrowers who reached their payment threshold before 2026 but did not yet have their discharge approved would not face these taxes.

Student-loan borrowers are bracing for higher monthly payments next year due to the slew of repayment changes. The combination of the processing backlog and the upcoming legislative changes has created a climate of uncertainty.

Many borrowers are worried about how these changes will play out in practice. The lack of clear information regarding the timeline for application processing adds to the stress.

As the Department of Education continues to navigate the backlog, borrowers remain in a holding pattern, waiting for approval on cheaper payment plans and debt relief.