Income-Driven Student Loan Payment Plans Are Failing Borrowers — What Should You Do if You Have One?

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Income-driven repayment (IDR) plans for federal student loans were introduced as a way to help borrowers who could not make payments. Borrowers whose income fell at under 150% of the federal poverty line could make payments of $0. Once a borrower makes payments for 20 to 25 years — even if those payments are $0 — they could qualify for loan cancellation. Roughly half of IDR plan participants are making $0 monthly payments.

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A new investigation by news site NPR reveals that the program has been “badly mismanaged by loan servicers and the U.S. Department of Education.” The documents revealed that out of 4.4 million borrowers who had been repaying the loans for at least 20 years, only 32 had their loans canceled through the IDR program.

Even worse, loan servicers have not been tracking or keeping records of loan payments to track when a borrower’s loan qualifies for cancellation.

“It is not on borrowers to be keeping two decades’ worth of records of how their student loan payments were made and whether each payment counted towards cancellation,” Abby Shafroth, an attorney at the nonprofit National Consumer Law Center (NCLC), told NPR.

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Yet, if you have student loan debt you’ve been repaying under the IDR, that could very well be your best course of action. Be proactive about tracking your loan payments so you have proof when your loan comes due for cancellation.

If you’ve already got two decades of payments under your belt, call your servicer. NPR points out that “some servicers didn’t know if borrowers qualified for cancellation if they were asked, by borrowers, to do a labor-intensive records review.” By calling and requesting this review, you can put the burden on your loan servicer to do the research required.

Meanwhile, advocacy groups are fighting for legislation that will put the burden on the Department of Education to track IDR loan payments or to provide broad-based debt cancellation. If you qualify for $0 payments, continue submitting those payments and keeping your own records.

See: Can the Debt Snowflake Method Help You Pay Off Student Loan Debt Faster?

So far, 116 advocacy organizations have submitted a letter to the Biden Administration requesting IDR reform. You can also write to your state senators and congressional representatives to show your support for the reform request. There is hope that positive change is on the horizon.

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“We will be making operational changes to get things right moving forward, and we will fix this for the borrowers who have been harmed by past failures with payment counting,” the Education Department said in a statement to NPR.

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About the Author

Dawn Allcot is a full-time freelance writer and content marketing specialist who geeks out about finance, e-commerce, technology, and real estate. Her lengthy list of publishing credits include Bankrate, Lending Tree, and Chase Bank. She is the founder and owner of, a travel, technology, and entertainment website. She lives on Long Island, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten, and three lizards of varying sizes and personalities – plus her two kids and husband. Find her on Twitter, @DawnAllcot.
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