Student Loan Updates for January 2026

New year, New rates (And a Few Long-Awaited Updates)

How were the holidays? Christmas, Hanukkah, Festivus – whatever you celebrate, we hope it was a good one. And if you’re a Festivus fan, you know the season wouldn’t be complete without the Airing of Grievances. Consider this month’s newsletter a very responsible, financially focused version of that tradition. We’ve got long-delayed applications, confusing payment letters, and forgiveness timelines that feel more “eventually” than “promptly.” There is progress happening, but much like that package stuck in transit, it’s arriving later than anyone would like.

IDR and PSLF Buyback Backlogs: A Great Gift, Arriving Way Too Late

Student loan servicers processed 245,000 IDR applications in November, while receiving 157,000 new ones during the same period. That’s real progress. As of December 1st, the “official” IDR backlog sat at 802,000 applications.

Translation: If you’re switching repayment plans or making changes, expect roughly a three-month processing timeline. That said, these numbers are already feeling dated. While we’ve seen some applications turn around in as little as three weeks, it hasn’t been consistent.

If you’re still stuck in the SAVE plan waiting for an application to process (or haven’t submitted one yet), filing a tax extension this year may be smart. If your current application falls through (or you exit SAVE later in 2026) you could be required to submit 2025 tax returns, which may result in a higher payment for most borrowers.

If you do extend, make sure you still calculate and pay any taxes owed by the normal deadline to avoid penalties.

Meanwhile, PSLF Buyback applications continue to move in the wrong direction. The Department of Education processed only about 3,000 Buyback applications in November, while 4,000 new ones came in. The backlog remains just over 80,000, essentially unchanged from last month.

So what should you do if you believe you’ve met the 120 qualifying payments, but you’re waiting on Buyback to give you full credit?

Here are two common strategies we use:

1. If you’re confident you’ve met all PSLF requirements, it’s usually best to request PSLF Forbearance on your Employer Certification form. This will prevent you from making unnecessary payments while you wait. If you did not check that box, contact Federal Student Aid (not your servicer) and request PSLF Buyback Forbearance.
   Pro tip: Make sure you have employer certification letters on file confirming your qualifying service.
2. Some borrowers keep paying anyway. If your payments are affordable and you’re within 12 months of 120, you may actually hit forgiveness through the standard PSLF process before your Buyback application is processed. Are you throwing money away? Nope. Any PSLF-related overpayments (including Buyback adjustments) will be refunded.

Wheel of Fortune: The IDR Edition

Lately, we’re seeing a wave of IDR approval letters with payment amounts that make absolutely no sense. Some list amounts far too high, while others are suspiciously low.

In some cases, borrowers have multiple applications in the system tied to different income data. In many others, the numbers are just…wrong. We can’t trace them back to any valid calculation. It genuinely feels like someone is spinning a wheel.

If your payment letter looks off, contact your servicer immediately.

Even stranger: the terms of these IDR approvals are all over the place. An IDR payment should be valid for 12 months, period. Yet we’re seeing approval letters showing 12, 18, and even 24 months. In 15 years working with IDR plans, I’ve never seen this.

We’re digging into it and will report back once there’s clarity. But hey, the longer the better if your income is increasing!

Borrower Defense Loan Discharge is Back in the News

Borrowers covered under Sweet v. Cardona (now Sweet v. McMahon) got a scare earlier this month when the Trump/McMahon administration asked the court to push the decision deadline back by 18 months, citing delays in reviewing roughly 200,000 claims. Mass layoffs earlier this year certainly didn’t help.

Quick refresher: the first Trump administration allowed borrower defense claims to pile up. Under the settlement, the Biden/Cardona administration agreed to discharge claims outright if they weren’t reviewed by a specific deadline.

That deadline? January 26, 2026.

Good news: the court is not budging. The deadline remains in place. That means a lot of borrowers should be receiving very good news this spring.

What Happened to My Forgiveness Tracker?

PSLF borrowers know how reassuring it is to see that forgiveness tracker on the Federal Student Aid website. Last spring, the Department of Education finally added a similar tracker for 20- and 25-year IDR forgiveness.

However, just after a couple of months, it disappeared. The Department of Education cited SAVE litigation issues and erroneous reporting, initially promising it would return soon.

Now? In a recent lawsuit status report, the Department of Education stated they currently have no plans to bring it back.

While frustrating, this is also a clear reminder of the risks baked into Income-Driven Repayment plans. Don’t get me wrong: IDR plans can save borrowers a tremendous amount of money. But they also come with uncertainty, political risk, complexity, and stress.

At Student Loan Professor, we work hard to offset those risks through education, updates, and one-on-one strategy. Still, for many borrowers, the guaranteed outcomes and simplicity of refinancing can outweigh the potential savings of IDR and forgiveness. As we always say: weigh the savings against the stress and choose wisely.

Speaking of refinancing, rates continue to drop. One of our partner lenders was advertising fixed rates below 4%! We’ve not seen that in several years. You can schedule a free refinancing strategy meeting or browse our vetted partner lenders anytime. We’ve secured exclusive rate discounts and cash rebates with most of them.

Have Questions? Let’s Talk.

As we officially pack away the decorations and head into the new year, this is your friendly reminder that you don’t have to carry the weight of student loan decisions on your own. The rules keep changing, timelines are unpredictable, and the “right” strategy is different for everyone.

So if any of these updates apply to you, or if you’re feeling unsure about what your next move should be, reach out to us for a personalized review of your situation. We’ll help you cut through the noise, avoid costly missteps, and choose the strategy that best supports your long-term financial goals.

Let’s start the conversation today. We’ll help you start 2026 with confidence and a plan that makes sense.