Student-loan forgiveness delays will soon become a bigger problem for borrowers

Core Points - The Trump administration is facing a backlog in processing student-loan forgiveness applications, particularly for income-driven repayment plans and the Public Service Loan Forgiveness program [1][3] - The backlog was exacerbated by legal challenges against the Biden administration's SAVE plan, leading to a significant number of pending applications [2][3] - As of July 31, 1.3 million income-driven repayment plans and 72,730 PSLF requests are pending, prompting advocacy groups to push for quicker processing [3][4] - The American Federation of Teachers has amended a complaint into a class action, urging the Department of Education to cancel loans for borrowers who have met their payment thresholds [3][4] - Loan forgiveness will become taxable again starting January 1, 2026, which could result in significant tax liabilities for borrowers if their applications are not processed by the end of the year [5][6] - Changes to repayment plans under Trump's spending law may lead to higher monthly payments and new taxes for borrowers, complicating the situation further [6][7] - Advocates are calling for expedited processing of applications to prevent borrowers from facing new tax burdens on their loan forgiveness [8]