The Department of Education will deny nearly half a million student loan borrowers who applied for the lowest repayment plan based on their income. Getty Image/Zooey Liao/CNET
Nearly half a million federal student loan borrowers who applied for lower monthly payments will be denied by the Department of Education.
Based on internal documents obtained by Politico, the department is rejecting 460,000 student loan borrowers who selected the lowest payment option based on their income. For most applicants, that was the Saving for a Valuable Education repayment plan.
SAVE was struck down by a federal court in February, so how were people still applying for the plan? It's likely the Education Department is still processing applications submitted before the Trump administration removed the SAVE plan as an option on Feb. 21, 2025, said student loan expert Mark Kantrowitz.
As of June 30, the department reported 1.5 million pending applications for borrowers who are seeking Income-Driven Repayment plans. It processed 186,731 applications in June.
The Department of Education did not immediately respond to a request for comment.
Processing delays are the latest hurdle for borrowers trying to navigate student loan repayment. Millions of SAVE borrowers' loans are currently in a general forbearance, with payments expected to remain on hold until mid-2026. However, the Department of Education announced this month that those loans will start accruing interest again on Aug. 1, so borrowers may be feeling pressured to choose another repayment program.
If you've applied for a repayment plan, here's what you need to know about the status of your application and when you could start repayments.
Read more: SAVE Student Loan Borrowers Have Less Than 2 Weeks Before Interest Restarts. Here's What to Do
How can you find out the status of your loan and repayment plan request?
... continue reading