Trump's administration removed key IDR plans for student loans - here's what it means

Two key applications for student loan forgiveness and repayment were removed by the Trump administration's Department of Education on Friday (February 21).

The applications affected include income-driven payment plans (IDR) and federal direct consolidation loans.

But what does this mean? Here is a breakdown of everything you need to know.

What are income-driven payment plans (IDR) and federal direct consolidation loans?

Income-drive payments (IDR) are based on factors such as your income, and family size, and is a loan you would be expected to pay back for 20 or 25 years. After that, any outstanding balance is wiped.

There are several plans you can apply for through the IDR application form such as Income-Contingent Repayment (ICR), Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Saving on a Valuable Education (SAVE).

Federal Direct consolidation loans enable you to mergemultiple federal student loans into one loan with a single monthly payment.

According to studentaid.gov, the new consolidated loan’s interest rate "will be the weighted average of the interest rates of the loans being consolidated rounded up to the nearest one-eighth per cent."

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How do we know these two student payment plans have been removed?

On Friday, these applications were quietly removed without an official announcement, withForbes reporting that the application buttons on the department’s IDR and consolidation websites were greyed out.

As seen on the studentaid.gov website, a banner at the top of the page reads: "A federal court issued an injunction preventing the U.S. Department of Education from implementing the Saving on a Valuable Education (SAVE) Plan and other income-driven repayment (IDR) plans. As a result, the IDR and loan consolidation applications are currently unavailable."

Why have these two student payment plans been removed?

The notice on the studentaid.gov website refers to the recent federal court decision where the 8th U.S. Circuit Court of Appeals ruled to block SAVE and IDR payment plans last week.

It comes amid ongoing legal proceedings over SAVE - a payment plan introduced by President Joe Biden which included lower payments and pathways to student loan forgiveness - but this was legally challenged by Republicans-led states last summer.

So this latest federal court decision has not only blocked SAVE but has now also the three other IDR plans causing further disarray to the federal student loan repayment system.

However, the Student Borrowers Protection Center has slammed the Trump Administration and shared concern for those who will be affected by these changes.

“Shutting down access to all income-based repayment plans is not what the 8th Circuit ordered—this was a choice by the Trump Administration and a cruel one that will inflict massive pain on millions of working families, it said in a statement on its website.

"The U.S. Department of Education’s choice to interpret the 8th Circuit’s decision in such a maximalist way has further damaging ramifications. Beyond SAVE, borrowers are now unable to access the three other IDR plans that exist, creating more chaos and uncertainty at an already precarious time.

"In addition to removing the IDR options from the website, borrowers may not be able to recertify their income, which they are required to do once a year or when their income changes. IDR is also critical for public service workers seeking Public Service Loan Forgiveness."

Elsewhere, a woman begs Donald Trump for her job back after being fired by DOGE, and Trump somehow congratulates himself in comments on German election.

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