The Department of Education has announced a three-month freeze on all income-driven repayment (IDR) and consolidation applications for student loan borrowers, following a federal court ruling. This decision has significant implications for borrowers who rely on IDR plans to manage their loan payments based on income, potentially leaving them only with high-cost repayment options. While paper applications for loan consolidation are permitted, the memo sent to loan servicers outlines the department’s need to pause the processing of applications until further legal clarity is reached.
"There is a lot to clean up. We will be working for [the Office of Federal Student Aid] to implement that transition once courts clear things up..."
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