On April 19, one day before the release of a highly critical performance audit by the U.S. Government Accountability Office, the Department of Education (ED) announced a series of actions it is taking to “address[] historical failures in the administration of the federal student loan programs.” The actions are directed at income-driven repayment (IDR) plans, which are used by student borrowers on over half of the more than $1 trillion in outstanding federal student Direct Loans. IDR plans allow borrowers to make lower monthly payments over an extended term of 20 to 25 years of repayment, after which borrowers become eligible for forgiveness of their remaining loan balance. Some of these changes will also impact borrowers applying for Public Service Loan Forgiveness (PSLF).
