More than 800,000 US borrowers still waiting for student loan relief: Income-based plans and forgiveness on hold

More than 800,000 federal student loan borrowers in the United States are facing prolonged delays as they wait for approval of affordable repayment plans or loan forgiveness, according to recent court filings referenced by CNBC. For many, the wait has stretched from months into more than a year, adding to financial pressure at a time when student loan defaults are rising and enforcement actions are resuming.

The data, submitted by the US Department of Education, points to persistent bottlenecks in processing income-driven repayment applications and Public Service Loan Forgiveness (PSLF) requests—two programmes that millions of borrowers depend on to manage their education debt.

Hundreds of thousands await income-driven repayment approval

As of the end of December, 734,221 applications to enrol in income-driven repayment (IDR) plans were still pending with the Education Department. These plans are designed to keep student loan payments affordable by linking monthly bills to a borrower’s income, with any remaining balance forgiven after 20 or 25 years.

For borrowers who rely on these plans to stay afloat financially, the delays can be unsettling. Advocates warn that without timely access to IDR options, many borrowers are left vulnerable to missed payments and eventual default.

Figures shared with the court and reported by CNBC show that while the IDR backlog has eased from its peak last summer—when nearly 1.4 million applications were pending—it remains sizeable. New requests continue to arrive in large numbers each month, making it difficult for the system to catch up.

PSLF Buyback backlog continues to grow

The situation is even more challenging for public service workers seeking relief through the PSLF Buyback option. By December, 83,370 borrowers were still waiting for decisions on their buyback applications.

The buyback pathway allows eligible borrowers to make retroactive payments for months spent in deferment or forbearance, helping them complete the 10 years of service required for loan forgiveness. The broader PSLF programme, created in 2007, was meant to reward long-term public service careers in government and non-profit organisations.

Yet, as CNBC has pointed out, there are borrowers who have been in limbo for over a year, continuously checking their application status without getting any clear answers. For most people, this kind of uncertainty has led to anxiety that the federal loan forgiveness perks they were promised may never materialize.

Staffing cuts and policy shifts deepen processing delays

Education experts point to recent policy changes as a key reason behind the growing backlog. After courts blocked the Biden administration’s SAVE repayment plan, large numbers of borrowers were forced to submit fresh applications under alternative income-driven plans.

At the same time, staffing reductions at the Education Department have limited the agency’s ability to handle the surge. Specialists argue that fewer hands managing an influx of complex repayment and forgiveness requests has inevitably slowed the system, particularly for PSLF-related cases.

Rising defaults add urgency to the crisis

These delays are unfolding against a troubling backdrop. More than 42 million Americans currently hold federal student loans, with outstanding debt exceeding $1.6 trillion, according to government data cited by CNBC.

Currently, it's thought that around 9 million borrowers have defaulted, and the government has gone ahead with wage garnishments. Experts caution that tax refund seizures might also be implemented later this year, thus escalating the situations for those borrowers who are still waiting for relief on their repayments.

Consumer advocates emphasize that easy access to affordable repayment plans and forgiveness of loans is not merely a matter of policy but a real financial lifeline to millions. Until now, the Education Department has neither confirmed nor denied the intention to clear the backlog, which is causing anxiety among borrowers as the waiting time prolongs.
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