IDR Applications Blocked for Three Months: What PSLF Candidates Should Know

You may have seen some news over the weekend regarding a memo the Washington Post received on Friday.

The headlines covering this have created more panic than is warranted, IMHO, so I wanted to share an update with you all…

The only change since the Dept of Ed took down the online IDR and consolidation applications is that servicers have now been advised not to accept online or paper IDR applications for the next 3 months, or until otherwise notified. Additionally, no one is able to recertify their income during this period.

SAVE Borrowers:

If you’re in the SAVE forbearance, stay there during this break. This has been the guidance all along for most of you.

If you’re in IBR, ICR or PAYE:

Simply stay the course with your monthly payments. You won’t be asked to recertify in the near-term.

We have spoken to some of you who consolidated and/or applied for SAVE recently, but have received invoices for monthly payments based on an extended term. If this applies to you, contact your servicer directly this week. If there’s no record of your SAVE application, you can request a general forbearance during this time. Any payment based on an extended term does not qualify for PSLF.

PSLF Candidates:

There’s some misinformation around PSLF being blocked by this latest action… rest assured, PSLF is not and has not been targeted here. The PSLF Form remains available to all borrowers. What WILL be decided in the near-term is which Income-Driven repayment plans will exist moving forward. SAVE participants are expected to be able to buy back missed time later. At a minimum, IBR will be an option for everyone, as it was created by Congress and is not being targeted by the courts.

2024 Tax Filing:

This latest news, and the general tone of this administration, suggests that the liberal treatment of income documentation for IDR plans is likely coming to an end. I’m not sure you’ll be able to dodge higher payments by extending your 2024 tax filing, as has been possible in recent years.

We’ll continue to keep you updated, and thank you for your continued trust.

Have questions? Reach out—we’re happy to help.

About Author

Jason DiLorenzo

Jason is the Founder of BenElevate, an early stage fintech company working to address the student debt crisis by bringing to bear tools, expertise, and bespoke solutions to streamline student debt management for borrowers and employers.