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Student Loan Borrowers Experiencing Severe Delays in Income-Driven Repayment Plan Processing

February 25, 2016 | Adam S. Minsky, Esq. Articles Current Events Income-Based Repayment Income-Driven Repayment Pay-As-You-Earn

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With the introduction of the new Revised Pay As You Earn (REPAYE) plan in December, and the subsequent release of a mind-bogglingly complicated new application for all income-driven repayment plans, I have been seeing significant processing delays and backlogs across the federal student loan servicing system. These problems are affecting borrowers who are applying for income-driven repayment plans for the first time, borrowers who are re-certifying their income to remain in their current income-driven plans, and borrowers who are requesting to switch to a different income-driven plan, such as REPAYE.

By way of background, income-driven repayment applications are supposed to be processed within about 10 business days. Servicers rarely have been able to have such a “rapid” turnaround in my experience, but they typically process applications within one billing cycle.

Since January, however, federal student loan servicers across the board seem to be taking 30-60 days or longer to process applications for income-driven repayment, pushing many borrowers into temporary forbearances if they cannot afford their normal monthly payments. This isn’t just for the new REPAYE plan, but also for borrowers on Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Income-Contingent Repayment (ICR). Agents for the following federal student loan servicing companies have all told me that they are experiencing significant backlogs and delays:

  • FedLoan Servicing
  • American Education Services (AES)
  • Great Lakes Higher Education
  • Navient

If you have submitted an application or re-certification request for income-driven repayment, or you anticipate doing so soon, you should expect delays. Be sure to routinely follow up with your loan servicer to check on the status of your application, and stay on top of things to make sure your application gets processed.

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Articles Current Events Income-Based Repayment Income-Driven Repayment Pay-As-You-Earn

About Adam S. Minsky, Esq.

Adam S. Minsky founded the first law office in Massachusetts devoted entirely to assisting student loan borrowers, and he is one of the only attorneys in the country practicing in this area of law. He provides counsel, legal assistance, and direct advocacy for borrowers on a variety of student loan-related matters. He regularly speaks to students, graduates, and advocates about the latest developments in higher education financing.

Books by Adam S. Minsky

The Student Loan Handbook for Law Students and Attorneys

The Student Loan Handbook for Law Students and Attorneys

Student Loan Debt 101

Student Loan Debt 101: The Definitive Guide to Understanding and Managing Your Student Loans

Student Loans for Parents and Cosigners

The Student Loan Guide for Parents and Cosigners

617-936-2788
asminsky@minsky-law.com
By Appointment Only 265 Franklin Street, Suite 1702
Boston, MA 02110

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