Student loan repayment plan applications reopened by Education Department: What to know
How dismantling Education Dept. could affect schools
President Donald Trump on Thursday signed an executive order aiming to dismantle the Department of Education, advancing a key promise from his campaign. The president claims the department is wasteful and White House press secretary Karoline Leavitt says the order will move to greatly minimize the agency. LiveNOW's Austin Westfall discusses what this means for the nation's schools with Dr. Shaan Patel, CEO and founder of Prep Expert, a college admissions and test preparation company.
WASHINGTON - The U.S. Education Department on Wednesday reopened online applications for income-driven repayment plans for student loan borrowers after being taken down in response to a court ruling.
The removal complicated the renewal process for student loan borrowers already enrolled in repayment plans.
Here’s what to know:
Student loan repayment plan applications reopened
The backstory:
The applications for income-driven repayment plans were taken down in response to a February court ruling, which blocked the Biden administration’s Saving on a Valuable Education (SAVE) Plan and parts of other income-driven repayment plans.
The American Federation of Teachers filed a lawsuit seeking to force the department to accept and process applications for repayment plans.
FILE - Students walk on the campus of the University of Illinois at Urbana-Champaign. (Brian Cassella/Chicago Tribune/Tribune News Service via Getty Images)
What we know:
The Trump administration needed to revise the income-driven repayment plan application in order to comply with the February ruling, said James Bergeron, acting undersecretary at the Education Department.
On Wednesday, the department announced the reopening of applications for borrowers.
Borrowers can apply for the Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Income-Contingent Repayment (ICR) plans using the updated application, which is located at StudentAid.gov/idr.
Big picture view:
Income-driven repayment plans take a borrower’s finances and family size into account when calculating monthly payments, but borrowers must periodically demonstrate they still qualify. When forms were unavailable, some borrowers were unable to complete that process.
The other side:
While the online application was down, officials said there were no disruptions to the paper application process. But delays in processing online applications held up relief for borrowers, including those enrolled in the Public Service Loan Forgiveness program, said Persis Yu, deputy executive director for the Student Borrower Protection Center, which represented the plaintiffs.
"Every day these applications go unprocessed deprives borrowers of critical time toward PSLF relief and financial stability," Yu said.
Advocates for borrowers encouraged them to be prepared for delays in processing as the department begins accepting applications again.
What they're saying:
"Looking at the application today, it does appear that everything is back online," Sabrina Calazans, executive director of the Student Debt Crisis Center, told the Associated Press. "Borrowers should still apply for the plan that works for them."
She said borrowers should continue to plan for how to tackle their student debt, despite the Trump administration's dismantling of the Education Department. Not paying back loans or meeting payments can result in delinquency and defaults.
Student loans to be managed by Small Business Administration
What we know:
Meanwhile, President Donald Trump announced on Friday that student loans will be moved from the Department of Education to the Small Business Administration. The announcement came a day after Trump signed an executive order to dismantle the Department of Education.
What they're saying:
"We have a portfolio that's very large, lots of loans, tens of thousands of loans," Trump said at an event in the Oval Office with Defense Secretary Pete Hegseth. "Pretty complicated deal, and that's coming out of the Department of Education immediately. And it's going to be headed up by Kelly Loeffler, SBA, and they're all set for it. They're waiting for it. And it'll be serviced much better than it has in the past. It's been a mess."
What's next:
Education Secretary Linda McMahon said she is preparing to relocate the department’s core operations to other agencies and roll back federal regulations. In an opinion piece published Friday by FOX News Channel, she said abolishing the department "will not happen tomorrow," but she plans to pave the way.
"We will systematically unwind unnecessary regulations and prepare to reassign the department’s other functions to the states or other agencies," McMahon wrote.
The functions to be reassigned include the distribution of federal money to support low-income students and students with disabilities, the department’s management of student financial aid, civil rights enforcement and data collection, she wrote.
Eliminating the department altogether would be a cumbersome task, which would likely require an act of Congress.
The Source: This story was reported using information published by the U.S. Department of Education on March 26, 2025, as well as interviews conducted by the Associated Press. It was reported from Cincinnati, and the AP and Heather Miller contributed.