Summary
In August, the Education Department under President Donald Trump rejected over 300,000 student loan repayment plan requests. Many of these requests were denied due to confusion over which repayment plan was appropriate. This affects borrowers who are faced with continuing their original payment plans.
Key Facts
- The Education Department denied 327,955 student loan repayment requests in August.
- The denial affects student loan borrowers, potentially leading to higher payments or paused payments where interest builds.
- Over 42 million Americans have student loans, with total debt exceeding $1.6 trillion.
- 802,730 applications for Income-Driven Repayment (IDR) plans were pending in November.
- IDR plans help lower payments based on income, with possible debt cancellation after 20 or 25 years.
- Denials cited "unforeseen ambiguity" in choosing the right repayment plan.
- Rejected borrowers are encouraged to reapply for repayment plans.
- More than 5 million borrowers are in loan default, and wage garnishments may resume soon.
