Linda McMahon, US education secretary, outside the White House in Washington, DC, US, on Wednesday, June 10, 2026. McMahon is overseeing vast changes to federal student loan programs. Photographer: Aaron Schwartz/CNP/Bloomberg
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Student loan borrowers are reporting increasingly worsening problems and inaccuracies with application processing for popular repayment plans. And the issues could not be coming at a worse time. In just a matter of days, the Education Department will start implementing some of the most significant changes to federal student loans in decades.
The problems are impacting the online application for income-driven repayment plans, repayment options for federal student loans that offer borrowers affordable payments tied to their income and family size. IDR applications have been plagued by problems and backlogs for more than a year after the Education Department shut down the IDR system in response to legal challenges over the SAVE plan, a Biden-era program that was intended to be the most affordable IDR option. Nevertheless, the department has continued to tout the online IDR application as the best and fastest way to apply or recertify for an IDR plan.
“Apply Faster with Federal Tax Information” at StudentAid.gov, said the Education Department in online guidance last updated in March. “Providing consent eliminates much of the time-consuming work of filling out an application. By electronically importing your financial information, you ensure your application has the most up-to-date data.”
But as borrowers report increasingly widespread problems with the online IDR application system, advocacy groups are expressing concerns about the Education Department’s ability to implement the major student loan program changes starting in July. Here’s the latest.
Problems With Online Student Loan Repayment Applications
The online application system for income-driven repayment plans, which offer borrowers affordable monthly payments and eventual student loan forgiveness, is seemingly causing an array of problems. According to recent reporting from CNBC, issues include:
- Failure to display all income-driven repayment plans a federal student loan borrower may be eligible for, particularly the PAYE plan. While PAYE is being phased out in 2028, it is often the most affordable repayment option for borrowers who are currently eligible. If PAYE isn’t displayed as an option, borrowers may instead have to select a different income-driven repayment plan that may result in substantially higher monthly payments.
- Displaying inaccurate information on monthly payments for income-driven repayment plans, such as indicating a borrower’s monthly payment will be $50 per month regardless of their income. This may make it difficult for borrowers to determine what their monthly payments will actually be under the various repayment options, and it could make it impossible for them to make an informed choice.
- Encouraging borrowers to consolidate their federal student loans when consolidation may not be necessary at all. In fact, consolidating federal student loans right now could be a devastating mistake for many borrowers, resulting in the loss of existing student loan forgiveness credit and limiting repayment plan options for the new consolidation loan.
Other problems borrowers are seeing in the online income-driven repayment plan application include a failure to adjust a married borrower’s student loan payments proportionally by factoring in their spouse’s federal student loans; displaying an inaccurate warning about leaving the Income-Based Repayment plan for borrowers who are simply recertifying their income for IBR and are not switching plans; and providing erroneous or incomplete information on borrowers’ current monthly payments.
Borrowers have been sharing information on other application problems in public forms, as well, including error messages when trying to choose a repayment plan.
“Is anyone else getting a 404 error when trying to start the loan consolidation application?” asked one user on Reddit on Sunday. “I just graduated from medical school, and I’m trying to consolidate before residency starts, but every time I select an IDR repayment plan in the application, it sends me to a ‘404 Not Found’ page.”
“Is there an IBR calculator that is accurate?” asked another Reddit user. “I am seeing so many people post about IBR payments being miscalculated/high.”
Application Issues Worsen As Major Student Loan Changes Take Effect
The issues with the online IDR applications are arriving at the worst possible time, just as millions of borrowers are beginning to feel the effects of significant changes to federal student loan programs.
Starting on July 1, the Education Department will begin sending out official notices to more than seven million borrowers in the SAVE plan, giving them 90 days to pick a different repayment plan as the SAVE program comes to an end. Borrowers who want to remain in income-driven repayment will need to affirmatively reapply for a different plan (such as IBR or PAYE) by using the online application system. If they don’t switch plans, the department indicated it will place borrowers into a Standard repayment plan, which may result in unaffordable payments and lost progress toward student loan forgiveness.
Also on July 1, the department is planning on launching a new income-driven repayment plan called the Repayment Assistance Plan, or RAP. RAP will function much differently from existing IDR options and will have a tiered repayment formula, an interest subsidy and a principal benefit, and quirks related to student loan forgiveness credit. The department has never before launched a major new repayment plan for student loans while simultaneously sunsetting a different plan.
The department is also busy preparing for other major changes to federal student loan repayment programs, including allowing Parent PLUS borrowers in the ICR plan to transition to IBR. And the department is launching a new Tiered Standard repayment plan on July 1, as well.
Watchdog Groups Have Warned About Worsening Problems Impacting Student Loan Repayment
Student loan borrower advocacy groups and watchdog organizations have been warning that staff reductions at the Education Department and diminished oversight of student loan servicers and other contractors that help operate the vast federal student loan system would make implementing major changes to repayment programs challenging, and could lead to serious problems.
“Beginning July 1, 2026, more than 7 million student loan borrowers enrolled in the Saving on a Valuable Education (SAVE) plan will be forced to switch repayment plans within 90 days,” warned Protect Borrowers in a statement last week announcing a new report on problems with student loan servicing. “With nearly 530,000 Income-Driven Repayment (IDR) applications currently unprocessed, this backlog will rapidly balloon into millions—threatening to leave borrowers waiting years for relief and pushing an already-broken student loan system to the point of collapse.”
“Education reduced its workforce by half and stopped key oversight of its loan servicers, which help manage a portfolio of more than $1.6 trillion in federal student loans,” said the Government Accountability Office, or GAO, in a report in March analyzing the impacts of reduced Education Department oversight of its student loan servicers and contractors. “By discontinuing assessments of servicer accuracy and call quality, the agency risks overpaying servicers for poor service. In turn, borrowers may face financial consequences related to overbilling or being placed in the wrong loan repayment status.”
“Without this oversight, inaccurate records and poor call quality loom as growing risks for borrowers and the federal government,” continued the GAO in its report. “These risks are magnified by FSA’s coming rollout of large-scale changes to the federal student loan program that will affect millions of borrowers. Those borrowers will need accurate and complete information when they call for help.”
As the Education Department barrels ahead with the changes to federal student loan programs this summer, many borrowers appear to already be seeing the impacts of diminished staffing and reduced oversight of Federal Student Aid systems. If the warnings by borrower advocacy groups and government watchdogs are to be believed, things may be about to get even worse.
