Student Loan Servicer Clarifies Who Should Reapply For An IDR Plan

Forbes

a day ago

WASHINGTON, DC - JUNE 20: A sign marks the location of the U.S. Department of Education headquarters ... More building on June 20, 2025, in Washington, DC. The department has not yet clarified whether certain student loan borrowers should reapply for IDR if they already submitted an application. (Photo by J.)
One of the Department of Education's major student loan servicers has issued an updated notification clarifying that certain borrowers who have already applied for income-driven repayment should now consider submitting a new application to hasten processing. The revised guidance followed a more ambiguous announcement the servicer made earlier this month.
The statement by MOHELA comes as the IDR application system is under enormous strain. IDR plans, which are a type of federal student loan repayment option that provides borrowers with monthly payments based on their income and a path to eventual student loan forgiveness, have been inaccessible for millions of borrowers for months. At least eight million borrowers were thrown into an involuntary forbearance last summer due to a legal challenge over the future of the SAVE plan, the newest of four IDR programs. Many of these borrowers (some of which are pursuing Public Service Loan Forgiveness, a separate student loan forgiveness program) have applied to change to a different income-driven plan like ICR, IBR, or PAYE, but have been unable to enroll due to a massive backlog of applications. The backlog is in part due to the Trump administration's decision to temporarily shut down the IDR application system earlier this year following a new court order in the SAVE plan litigation.
Many borrowers, particularly those stuck in the SAVE plan forbearance or recent graduates trying to enroll in IDR for the first time, submitted applications to change IDR plans months ago, but are still waiting on a response. MOHELA's latest announcement suggests that reapplying could speed things up. But doing so may come with risks. Here are the details.
Updated Student Loan Servicer Statement Suggests Reapplying For IDR
MOHELA first posted a statement earlier this month suggesting that federal student loan borrowers who have applied for IDR should consider submitting a new application, particularly if they applied prior to April 27, 2025. This is roughly the date when the Department of Education began resuming IDR processing after revising the application form to comply with the latest court order in the SAVE plan litigation.
But MOHELA's initial announcement was difficult to decipher. The notice said that for borrowers who submitted an IDR application prior to April 27, ' Your application didn't include income info." MOHELA encouraged impacted borrowers to reapply. But many borrowers did include income information with their IDR application, and it was not at all clear whether these borrowers would need to reapply. The revised statement now displayed on MOHELA's website offers some clarity.
'If you submitted an Income-Driven Repayment (IDR) application prior to April 27th, 2025, and your application has not been processed yet, you can now reapply at StudentAid.gov to use your IRS verified income and select an eligible plan which may expedite processing,' says the student loan servicer. 'Your previous application will be automatically canceled.'
This suggests that borrowers don't necessarily need to reapply to IDR. But if you submitted an application prior to April 27th and are still waiting, MOHELA suggests that reapplying now could speed things up, particularly if you use the IRS data retrieval tool that links your income information from your tax return to the Department of Education's online IDR application system. This data retrieval tool has been down for much of the last year, but if is back up and running again, it could indeed expedite processing, as that is the tool's primary purpose. Borrowers who manually provide their income documentation by uploading it into the online application, or appending it to their paper IDR application, typically experience longer processing times.
Risks For Student Loan Borrowers Reapplying For IDR
Still, there are some potential risks student loan borrowers should be aware of if they are considering reapplying for their IDR plan. There are no guarantees that reapplying will actually expedite processing, notwithstanding MOHELA's statement (and note that MOHELA says it 'may' expedite processing, not 'will'). Anecdotal reports indicate that single borrowers are experiencing faster IDR processing than married borrowers, regardless of when they have submitted their application. And sometimes, submitting multiple IDR applications can cause unexpected problems such as delayed processing or multiple rounds of forbearances, which typically don't count toward student loan forgiveness.
It is also noteworthy that the announcement suggesting that borrowers reapply for IDR is only present on MOHELA's website. None of the Department of Education's other major contracted student loan servicers – such as Nelnet, Aidvantage, and EdFinancial – have similar announcements posted on their own websites. And the department's main website that provides guidance to student loan borrowers impacted by the ongoing IDR legal challenges provides no similar suggestion, either. Notably, the department's website was last updated on April 28, 2025 – the day after the cutoff suggested in MOHELA's announcement. So this information certainly could have been included with that update, in theory.
Critics of MOHELA may also point out that the loan servicer has been accused of making misleading statements to borrowers in the past. Most recently, the servicer sent out letters to millions of borrowers in the SAVE plan forbearance suggesting that their loans were subject to interest accrual, even though the Department of Education has confirmed that no interest should be accruing during the SAVE plan forbearance period.
These Student Loan Borrowers Should Consider Reapplying
Taking MOHELA's updated statement at face value, any federal student loan borrower with MOHELA-serviced student loans who applied for an IDR plan prior to April 27, 2025, and who manually provided income documentation by uploading it into the online application or attaching it to a paper application (or provided no income documentation at all), may want to consider reapplying. If you do reapply, be sure to use the online application system and opt into the IRS data retrieval tool when prompted, which MOHELA suggests is the key to expediting processing.
MOHELA also notes in its announcement that, 'Applications for the SAVE plan and 'lowest monthly payment' requests are still on hold and loans will stay in an administrative forbearance.' This is due to the ongoing legal challenge involving the SAVE plan. Borrowers who previously applied for IDR and specifically selected the SAVE plan or the option for the 'lowest monthly payment' (which are no longer even options on the newly-revised IDR application) should consider reapplying, regardless of who their student loan servicer is or whether they included documentation of their income with their original application.
Finally, MOHELA says that, 'If you have at least 1 loan on SAVE and 1 loan on another IDR plan, your application will remain on hold and your loans will stay in an administrative forbearance.' This statement is fairly ambiguous, and it is not clear if the loan servicer is suggesting that these borrowers also should reapply for IDR. But if you meet this description, you're pursuing student loan forgiveness (particularly through PSLF), and want to get back into repayment, it may make sense to reapply if the only other alternative is remaining stuck in a forbearance.