A major national labor union asked a federal court this week to force the Trump administration to reopen affordable student loan repayment plans and loan forgiveness programs. And the Department of Education has indicated it will take some initial steps to do so.
The request, made by the American Federation of Teachers through a motion for a temporary restraining order, follows the union’s filing of a legal challenge last week after the Trump administration effectively shut down access to income-driven repayment programs. The Department of Education is mandated by federal law to offer these repayment programs to student loan borrowers, which allow for affordable payments tied to income and can lead to eventual student loan forgiveness. Enrolling in IDR plans is also typically a requirement for those pursuing Public Service Loan Forgiveness, a separate loan forgiveness program for nonprofit and government workers.
After the motion was filed, the Trump administration indicated that it would take steps to reopen IDR applications for student loan borrowers as soon as Wednesday. But processing will not immediately resume. Here’s the latest.
Department Of Education Blocks Repayment Plans And Student Loan Forgiveness
The Trump administration issued a “stop work order” to its contracted loan servicers last month, instructing them to halt all processing for income-driven repayment plans. The Department of Education also removed the online and paper IDR application forms, effectively preventing borrowers from applying.
The order was in response to a new decision issued by the 8th Circuit Court of Appeals in an ongoing legal challenge over the Biden-era SAVE plan, the newest of several income-driven repayment options that was launched under President Joe Biden in 2023. A coalition of states led by Republican attorneys general filed a lawsuit to block the SAVE plan last year. In its new ruling issued in February, the 8th Circuit expanded the existing injunction that prevents the Department of Education from implementing the SAVE plan. While the court suggested that loan forgiveness under two related plans – ICR and PAYE – might be improper, the court stopped short of striking down or blocking those two plans. And the court did not order the department to prevent borrowers from accessing the IBR plan or the PSLF program, both of which the court acknowledged were expressly authorized by Congress.
But the Trump administration’s “stop work order” impacts all four income-driven repayment plans – not only SAVE, but also the ICR, PAYE, and IBR plans. And in effect, it also partially blocks PSLF for borrowers who must repay their student loans under an IDR plan to qualify. Consequently, borrowers can’t enroll in an IDR plan, change to a different IDR plan, request a recalculation of their payments due to changed financial circumstances, or recertify their income when required to do so, with some borrowers reporting huge increases in their monthly payments as a result.
Borrowers Ask Court To Issue Temporary Restraining Order To Reopen IDR Plans and Student Loan Forgiveness Pathways
In its filing late Monday, the AFT – represented by the Student Borrower Protection Center – asked the court to effectively force the Trump administration to reopen at least some of the income-driven repayment plans. The AFT argues that regardless of the 8th Circuit’s order, the Department of Education is legally required to offer these affordable payment plans, which are also a required component for borrowers pursuing student loan forgiveness through PSLF.
“Without Congressional authorization, the defendants have inexplicably and irrationally issued a Stop Work order shutting down all access to all income-driven repayment plans for borrowers seeking to enroll,” reads the motion. “Millions of student loan borrowers are being denied Congressionally mandated student loan repayment and forgiveness programs, simply because the defendants have unlawfully ceased to accept and process enrollment applications.”
Millions of student loan borrowers “are stuck in a devastating limbo” as a result of the Trump administration’s actions, says the AFT. The motion then provides a number of examples, supported by sworn declarations made by student loan borrowers:
- One borrower who works as a teacher has nearly fulfilled her repayment obligations to qualify for student loan forgiveness through PSLF. But she has been unable to leave the SAVE plan forbearance, and her applications to change repayment plans and pursue PSLF Buyback – a new program that allows borrowers to make a lump sum payment for non-qualifying forbearance periods – have not been processed. “Because of her student loan debt, she and her husband have not been able to save for retirement, nor have they been able to make contributions to their daughter’s college savings fund,” says the motion.
- Another borrower who works as a teacher “has 117 of the 120 months she needs to have her loans forgiven under Public Service Loan Forgiveness, and her loans should have been forgiven in August 2024, but she has been stuck in the SAVE Plan forbearance since June 2024” and has not been able to switch to a different qualifying repayment plan. “She was told by her loan servicer that her payment would be $900 per month, up from her income-driven repayment plan payment of $364 per month. She cannot afford payments of $900 per month. She has already spent years struggling with her loans. At times she has forgone heating her home and has accrued credit card debt to cover household expenses in order to remain current on her student loans.”
- Yet another borrower who works as an adjunct professor and is a single mother of two children “has not been able to accrue the final months of payments on an income-driven repayment plan that she needs since her loans were put in the SAVE Plan forbearance in July 2024. She tried in December 2024 to switch income- driven repayment plans, but her application was never processed; she tried again in February 2025, but was unable to submit the application.” The motion notes that “if her debt forgiveness is delayed, it will prevent her from building a life for her children. Her debt has already inhibited her ability to buy a home and to secure a job.”
Other borrowers, according to the motion, are unable to retire while their student loans remain stuck in limbo. And some borrowers who will experience dramatic increases in their monthly payments will be unable to afford their mortgage or childcare obligations if they cannot access IDR plans. One borrower “loses sleep, has panic attacks, and feels like her only option to is default on her loans” as a result of the turmoil.
What Happens Next For Student Loan Borrowers Pursuing IDR And Public Service Loan Forgiveness
The Trump administration has maintained that the IDR shutdown is temporary “to ensure these programs conform with the 8th Circuit’s ruling,” according to a Department of Education spokesperson. But borrower advocates are concerned that borrowers will be severely damaged by losing access to affordable payment plans on even a short-term basis.
A temporary restraining order or preliminary injunction is a mechanism by which an aggrieved party can ask a court to force the opposing party to engage in certain actions (or refrain from certain actions), even while the litigation is ongoing. In this case, the AFT is asking the court to order the Department of Education “to return to the status quo ante” when student loan borrowers “had access to income-driven repayment plans. Alternatively, the plaintiff asks the Court to order the defendants to halt all collections on borrowers and ensure that this time can count towards Public Service Loan Forgiveness until the defendants can satisfy its income-driven repayment plan obligations again.”
On Tuesday, during an initial scheduling hearing, the Trump administration indicated that it plans on reopening access to IDR applications for student loan borrowers as soon as Wednesday, March 26.
“In the first hearing since AFT filed its lawsuit against the U.S. Department of Education (ED) for barring access to Income-Driven Repayment (IDR) plans, ED, through its Department of Justice lawyers, stated that it plans to make IDR applications available tomorrow, March 26,” said the Student Borrower Protection Center in a statement on Tuesday.
“Today’s announcement shows that when working people band together and demand justice, we can make progress,” said AFT President Randi Weingarten. “Today, the federal government took a step because of our lawsuit to restore some borrowers’ rights. More must be done, but at the very least, the applications for IDR plans will be online and accessible.”
However, the Department of Education “will not immediately begin processing IDR applications,” says the SBPC. As a result, more than one million student loan borrowers seeking affordable payments and pursuing student loan forgiveness through PSLF “remain in limbo and unable to invoke their rights to affordable loan payments.” The next hearing in the legal challenge is scheduled for April 17.