Student Loan Repayment Denials

Benzinga

Hundreds of thousands of student loan borrowers were denied income-driven repayment requests due to administrative ambiguity, leaving many stuck in higher-cost plans or interest-accruing forbearance.

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00:00It's Benzinga bringing Wall Street to Main Street.

00:02Many student loan borrowers were denied requests to switch into income-driven repayment plans,

00:07according to CNBC. The U.S. Department of Education rejected 327,955 IDR applications

00:15in August and had another 800,2,730 requests pending as of late November.

00:21Borrowers whose applications were denied may remain in higher-cost repayment plans or in

00:26interest-accruing forbearance. In a court filing, the Education Department said it rejected the

00:31IDR applications due to an unforeseen ambiguity over which repayment plan borrowers should enter

00:36when multiple plans produced the same monthly payment. Officials said the agency procedurally

00:42denied requests from borrowers who asked to be placed in the plan with the lowest monthly bill

00:46because two plans resulted in equal payments. More than 42 million Americans hold student loans

00:53totaling over $1.6 trillion. The Education Department did not respond to CNBC's request for comment.

00:59For all things money, visit Benzinga.com.

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