The Department of Education released a troubling update this week, revealing significant delays in processing student loan forgiveness applications, with massive backlogs continuing to grow despite court-ordered progress requirements.
The Monday filing, submitted to a federal district court overseeing a settlement with the American Federation of Teachers, shows that over 802,000 income-driven repayment applications remain pending, while the Public Service Loan Forgiveness (PSLF) Buyback backlog has now reached 80,210 requests.
Student Loan Processing
The update marks the first time in months the department has provided detailed statistics on forgiveness processing. In November alone, the department processed 245,441 IDR applications, yet the backlog remains substantial after peaking at nearly two million earlier this year.
More concerning to borrowers and advocates, the department approved loan discharges for only 170 borrowers throughout November, all enrolled in the Income-Based Repayment plan, according to Forbes.
No discharges were granted for loans under the Income-Contingent Repayment or Pay As You Earn plans, despite the department's October commitment to resume processing forgiveness for these programs as part of its settlement agreement with the AFT.
The court filing revealed that department systems are currently configured to verify eligibility exclusively for IBR discharges, with programming for other IDR plans still in development. The National Student Loan Data System will not regularly assess eligibility for these additional plans until February 2026.
The department emphasized that the volume of applications processed monthly may not correspond to the number of discharges issued, as borrowers can opt out of an IDR discharge during a two-month notification period.
Critical information remains missing from the filing. Under the October agreement with the AFT, the department was supposed to provide data on the number of IDR applications received, discharges processed, and specific approval or denial figures for applications.
The absence of this data has raised concerns among advocates who argue that approval and denial information is vital for evaluating the department's progress. Without transparency, the department could deny every incoming application and label them as processed, though there is no evidence that this is happening.
The PSLF Buyback situation presents an even more alarming picture. Despite consistently processing between one and three thousand applications monthly, the backlog surged from approximately 49,000 in April to over 74,000 by September. The department's latest filing shows the backlog has now climbed to 80,210, even after processing 2,960 applications in November.
The rate of incoming applications continues to exceed the processing rate, with nearly 7,000 new PSLF Buyback applications submitted last month alone, CNBC reported. At the current pace, it would take the department 27 months to clear the existing backlog, not accounting for new applications that borrowers submit each month.
Millions of Borrowers at Risk
The processing delays come as approximately seven million borrowers enrolled in the SAVE plan face an uncertain future. The Education Department announced a proposed settlement agreement with Missouri on December 9 that would end the program pending court approval.
Under the settlement, the department will not enroll new borrowers in SAVE, will deny pending applications, and will transition all SAVE borrowers into other available repayment plans.
The department has not specified a timeline for this transition, but the situation, combined with the anticipated introduction of a new Repayment Assistance Plan later next year, could significantly exacerbate the application backlog for IDR plans and PSLF Buyback, further complicating circumstances for borrowers seeking lower payments and eventual loan forgiveness, as per the Department of Education.
