Student Loan Debt

Student loan debt is a problem for many Americans. The Education Department is only beginning to process a pile-up of applications for assistance. (Credit: Mikhail Nilov, Pexels) The cost of college continues to follow many Americans. The DOE hasn’t been helping. Indeed, the Department of Education has come under criticism of late for its significant backlog of student loan repayment applications. There are just over a million of them waiting to be processed, meaning more than a million Americans waiting to access income-driven repayment (IDR) plans – and struggling in the meantime. At present, people in the U.S. are saddled with roughly $1.8 trillion in student loan debt, and are paying over $500 per month toward their balances. IDR plans are designed to lower monthly payments for borrowers, based on their incomes and family sizes. But a temporary court injunction in February brought processing to a halt – for IDR plans, and others. "This mess started when the Trump administration essentially hit the panic button and froze all IDR applications earlier this year," finance expert Michael Ryan told Newsweek. "Their excuse? They needed to 'update the system' because of ongoing court challenges. They threw the baby out with the bathwater, blocking applications for programs that weren't even under legal challenge." U.S. Education Secretary Linda McMahon told members of the press this week that about 300,000 of the applications were processed in August, an attempt to lessen the pile-up. Still, some applicants have waited half a year – or more – for answers. And if the DOE’s current processing rate continues, Newsweek reports that it will take more than a year to catch up. Experts say it’s simply not enough of an effort. “What the current administration seems to dismiss is that these students borrowed money not only based on the landscape faced when borrowing, but also on what was presented as their then-current options for future affordable repayment and pathways to forgiveness,” Drew Powers, the founder of Illinois-based Powers Financial Group, noted to Newsweek. Women are especially feeling the strain of the limbo. About 64% of student loans debt is carried by them, with individual total loan amounts that are thousands of dollars greater than a man’s, on average. They also continue to be paid less due to a persistent gender wage gap. Added Ryan, of the broader problem: “These are borrowers who played by the rules … and trusted the government's promise of loan forgiveness. Now they're paying the price for administrative incompetence and political gamesmanship."

Student Loan Debt

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Student Loan Debt

DOE Chips Away at Massive Backlog of Student Loan Repayment Applications

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