ByAdam S. Minsky,
Senior Contributor.
Borrowers are contending with an ever-changing landscape of student loan developments, with no end in sight to the volatility. Significant developments this month will ultimately affect millions of Americans who have federal student loans. Those who are pursuing eventual student loan forgiveness or affordable payments based on income will be the most impacted.
Here’s a breakdown of the latest updates for borrowers, and how they will affect your student loans in the coming weeks and months.
On Thursday, a federal court formally approved an agreement between the Department of Education and the American Federation of Teachers to resolve an ongoing lawsuit. The AFT had contended that the department had failed to timely process applications for income-driven repayment, or IDR plans, which was effectively preventing borrowers from accessing affordable payments as well as Public Service Loan Forgiveness. The AFT later expanded its lawsuit, arguing that the department had unlawfully halted student loan forgiveness under several IDR plans and was setting borrowers up to be hit with significant tax consequences, as federal tax relief is set to expire at the end of 2025.
