Student loan forgiveness backlog tops 880,000 as processing stalls

Hundreds of thousands of student loan borrowers are bogged down in a backlog of applications for debt forgiveness and payment plans, according to court documents and federal data made public this week.

By the end of last month, 802,730 applications to switch over to an income-driven repayment plan were pending at the Education Department, along with 80,210 applications to get help through Public Service Loan Forgiveness Buyback. Last month, merely 170 individuals signed up for IDR plans and saw their loans forgiven; 280 loan forgiveness notices went out through the PSLF program.

These backlogs were compounded after the Trump administration laid off nearly half of the Education Department's workers in March, many of whom were helping the borrowers. The situation worsened after the federal government shutdown, from October 1 to November 12.

The logjam comes at a difficult moment. Over 42 million Americans hold student loans totalling more than $1.6 trillion. Trump officials said in April that over 5 million borrowers were in default, a figure that could reach 10 million. The backlog is expected to worsen as millions enrolled in the defunct SAVE plan must transfer to new repayment plans, accruing interest while they wait.

Borrowers pursuing PSLF face additional hurdles. Some who made their 120th qualifying payment are still waiting for their accounts to update, forcing them to choose between paying unnecessarily or risking delinquency. Meanwhile, PSLF eligibility remains in litigation after courts blocked a rule narrowing the definition of "public service."

The Education Department said it "remains committed to ensuring that every qualifying payment is properly credited to a borrower's account."