Student Loan Update 8/25/2025

Here is an update from the Department of Education on Student Loans. Even as some applications are processed, the department has struggled to keep up with demand. In its first filing on PSLF Buyback earlier this year, part of an interim agreement to provide monthly updates following a legal challenge over income-driven repayment plan delays, the department reported that it had processed 1,472 applications in April—with 49,318 still in the queue.

In May, the number of pending requests grew to 58,761, while 3,312 requests were processed. At the end of June, there were 65,448 pending requests, with 2,224 given a decision that month. In Update on PSLF and IDR applications from the AFT lawsuit.

*From my experience anything that takes "work" is delayed. IDR forms with uploaded documents vs linked tax information. PSLF forms faxed in vs completed through ED's PSLF help tool are delayed. I was told today the PSLF processing from 120 to forgiveness is not taking "around 6 months"

July, the backlog grew further to 72,730, with 3,280 requests being processed. Overall, there has been a 47 percent increase in the number of requests between April and July.

There is also a backlog for applications for income-driven repayment plans as many borrowers in SAVE forbearance have sought to switch into other plans to continue making progress toward loan forgiveness. The Trump administration increased pressure on borrowers to change plans after resuming interest charges earlier this month for those enrolled in SAVE.

"The Department urges all borrowers in the SAVE Plan to quickly transition to a legally compliant repayment plan—such as the Income-Based Repayment Plan," Secretary of Education Linda McMahon said in a statement in July. "Borrowers in SAVE cannot access important loan benefits and cannot make progress toward loan discharge programs authorized by Congress."

A major obstacle for borrowers is that switching repayment plans is not a quick process. The Department of Education is dealing with a massive backlog of income-driven repayment (IDR) applications, a problem made worse when the Trump administration temporarily shut down the entire processing system in the spring.

While the department has reported some progress, the logjam remains significant. Last month, officials reported 1,511,504 pending IDR applications. As of the latest filing, the backlog had dropped to 1,386,406, with 304,844 applications processed in July.

Source: CSLA Institute August, 2025