Listen in with VIN Foundation board member and Student Debt Education lead Dr. Tony Bartels in this next installment of our Student Debt Series. In this episode we’re covering the latest news on income-driven repayment application changes and more.
Topics covered included:
- What happened to the Income-Driven Repayment application?
- If borrowers are using an income-driven payment plan right now, what should they do?
- How do these changes impact monthly payments for borrowers?
- How about borrowers who are hoping for PSLF? How do the recent changes impact them?
- What’s the best approach for borrowers when dealing with loan servicers?
As always, we want to hear from YOU. Please share your thoughts by sending an email or joining the conversation.
NOTE: This is an ongoing situation, for continued updates visit the VIN Foundation Blog and student debt message board areas.
GUEST BIO:
Dr. Tony Bartels
Tony Bartels, DVM, MBA graduated in 2012 from the Colorado State University combined MBA/DVM program and is a VIN Foundation Board Member and Student Debt Expert, and an employee of the Veterinary Information Network (VIN). He and his wife, a small-animal internal medicine specialist practicing in Denver, have more than $400,000 in veterinary-school debt that they manage using federal income-driven repayment plans. By necessity (and now obsession), his professional activities include researching and speaking on veterinary-student debt, providing guidance to colleagues on loan-repayment strategies and contributing to VIN Foundation resources. Beyond debt, his professional interests include small- and exotic-animal practice. When he’s not staring holes into his colleagues’ student-loan data, Tony enjoys fly fishing, ice hockey, camping and exploring Colorado with his wife, Audra, daughter, Lucy, and their two rescued canines, Addi and Maggie.
LINKS AND INFORMATION:
VIN Foundation Student Debt Center
Time for your student loan physical exam? VIN Foundation My Student Loans tool
VIN Foundation Download My IDR Progress Google Chrome extension to help you grab a copy of your IDR forgiveness progress
VIN Foundation Blog, most recent:
VIN Foundation Navigating Uncertainty Checklist, what you can do now
VIN Foundation Relevant WikiDebt Resources:
Personalized student loan help from VIN and VIN Foundation
Department of Education Updates on Saving on a Valuable Education (SAVE Plan)
VIN Foundation GIVE page to support programs these programs & tools
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Email VIN Foundation: studentdebt@vinfoundation.org
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TRANSCRIPT
Intro
Tony Bartels, DVM, MBA: Specifically for student loans we’ve had some recent new uncertainty. So the last week of February, around that timeframe, the Department of Education pulled down the applications for Income Driven Repayment, which includes people who are trying to apply for a repayment plan for the first time and maybe have their payments based on their income. Or for those people who are using Income Driven Repayment plans, they have to recertify their income periodically and that same application is used for recertifying their income, so they have not been able to recertify their income. But also people who submitted those applications prior to this recent pause or removing the Income Driven Repayment applications, even those applications are not being processed.
Meet the Hosts and Podcast Overview
Jordan Benshea: That is student debt expert and VIN Foundation Board Member Dr. Tony Bartels, and this is the VIN Foundation’s Veterinary Pulse Podcast, special student debt series. I’m Jordan Benshea, Executive Director of the VIN Foundation. Join me as I talk with veterinary colleagues about critical topics and share stories, stories that connect us as humans, as animals, as a veterinary community. This podcast is made possible by individuals like you who donate to the VIN Foundation. Thank you. Please check the episode notes for bios, links, and information mentioned.
Current State of Income Driven Repayment Plans
Jordan Benshea: We are back again with our VIN Foundation student debt education expert, Dr. Tony Bartels, and we are here to talk about, hey, why not the latest in the student loan news as we head into this new month, in the midst of this new administration. Welcome, Tony.
Tony Bartels, DVM, MBA: Thank you, Jordan.
Jordan Benshea: We are in the wild, wild west or some version of some wild something as we look to navigate what’s going on with student loans for our colleagues. There’s been a lot of news around Income Driven Repayment plans lately, so what’s the latest with those?
Tony Bartels, DVM, MBA: The word of the year 2025 is uncertainty. We’re kind of watching this play out in a lot of different areas, but specifically for student loans we’ve had some recent new uncertainty. So, I’m losing track of the timelines here, but I think the last week of February, around that timeframe, the Department of Education pull down the applications for Income Driven Repayment, which includes people who are trying to apply for a repayment plan for the first time and maybe have their payments based on their income. Or for those people who are using Income Driven Repayment plans, they have to recertify their income periodically and that same application is used for recertifying their income, so they have not been able to recertify their income. But also people who submitted those applications prior to this recent pause or removing the Income Driven Repayment applications, even those applications are not being processed.
Impact on Borrowers and Recertification Issues
Tony Bartels, DVM, MBA: So, we’ve just seen kind of a wholesale halt or pause on Income Driven Repayment, particularly for those people that are applying or trying to recertify, which means they have reason to interact with the application and the system right now. For those people that they don’t have any reason to apply or they don’t have a reason to recertify their income, they may not have even noticed anything is different. So it’s really interesting to see how some people could be so significantly impacted in the short term and some other people who don’t have reason to interact with the system may not have even noticed any difference.
Jordan Benshea: So if somebody is supposed to recertify their income at this point, then what happens if they go to the studentaid.gov website and they’re trying to recertify their income?
Tony Bartels, DVM, MBA: Yeah, so typically what you would do, or what we generally recommend people do, is log into studentaid.gov and recertify that way. It’s usually the easiest and most straightforward method for recertifying your income. But right now, if you try to log, I mean, you can still log into your account and see your details, but you won’t be able to submit any kind of Income Driven Repayment application or a recertification application. There are some paper PDF applications floating around out there. We have one on the VIN Foundation Student Debt Center in the resource section under the Wikidebt resource, just in case. I mean, we’ve been hearing a variety of different reports.
Navigating the Uncertainty and Available Options
Tony Bartels, DVM, MBA: Some loan servicers are saying, “we’re not accepting any applications at this time.” The Department of Education is telling people, “don’t bother submitting an Income Driven Repayment application.” But some of the loan services are telling people, “if you can find a PDF application try submitting it.” So it’s kind of running the gamut. So again, coming back to that theme of uncertainty for 2025, and particularly around this Income Driven Repayment application.
Jordan Benshea: They’re normally recertifying their income, which will help determine their monthly payments. If they’re not able to recertify their income, then the chances that’ll impact their monthly payments, what happens?
Tony Bartels, DVM, MBA: Yeah. Correct. So we’ve actually seen this play out. This is where a lot of different events are converging at the same time, and not necessarily, in a good way. So we’ve had repayment, Income Driven Repayment, particularly that whole process has kind of been turned off or uniquely impacted since the pandemic, and we’ve tried to restart this. When I say we, it’s more the collective society has tried to turn this huge $1.6-$1.7 trillion student loan system on and off like a switch, and go figure it’s experienced some difficulties getting restarted. One of the deadlines that was approaching here at the beginning of this new year was the first time people needed to recertify their income for Income Driven Repayment plans again. So anybody that maybe hadn’t switched to the newer version of SAVE, which is a whole different topic we’ll talk about in a little bit, but people that have been using maybe Pay As You Earn or Income Based Repayment or Income Contingent Repayment plans may have had their recertification information due by December, January, February of 2025 here. So those people who have been trying to reapply, they’re essentially not having that income information processed, which has essentially been treated like you didn’t submit it. If you don’t submit the income information when it’s due during that recertification period and the recertification period expires, then they take your payment and they set it to something that looks like a standard 10 year plan payment, so a payment that’s based on your balance, your interest rate, and the payment that would be required to eliminate that balance over a 10 year period. That could be pretty significant. So we’re talking about student debt balances in the hundreds of thousands of dollar range and if you have a average veterinary income and maybe your payment was, oh, I don’t know because again, we haven’t had to recertify income for a long time, I mean, some people have very, very low income driven payments that were set from the time that they graduated veterinary school, they’re looking at payments jumping up to $2,500, $3,500, $4,500 a month, depending on their student loan balance. So, those are pretty big shocks. Not only emotionally but financially, so we see people scrambling to come up with some other option. Those other options are not great. I mean, you can request a forbearance or a deferment where your interest will accrue just to buy you some time, and that’s not a terrible place to be, particularly if you’re facing a monthly student loan payment that’s just not going to work in your budget. Or you can request one of the time driven options. Those are always options people could use, but because they’re not based on your income and if you have a rather large student loan balance, those time driven monthly payments can still be quite large. So depending on your balance, you can have a time driven repayment period that stretches out to 25 or even 30 years if you’ve consolidated your loans, but even those payments can be quite high. The problem with the time driven plan payments is they’re not forgiveness eligible, nor are the forbearance or deferment requests that you might make. So, we’ve got some issues there that, in the short term, we have reason to make sure that financially we can weather this period of uncertainty using a deferment or forbearance, or even a graduated or extended plan if you have to. But then starting to look at, when this does play out and there is some form of Income Driven Repayment application available again, which plan are you going to apply for and what might your payment look like in that plan?
Jordan Benshea: Was there any notification given as to why the application was taken down or the ability to recertify your income?
Court Rulings and Their Implications
Tony Bartels, DVM, MBA: Yeah, so what has been cited is a recent court ruling that pretty much affirmed what the court had said previously regarding the SAVE Income Driven Repayment plan. So, just a quick recap, in 2023 the prior administration had updated the Revised Pay As You Earn Income Driven Repayment plan to be the Saving On A Valuable Education plan, also known as SAVE. Anybody that was using RePAYE was automatically converted into SAVE when that took effect around October of 2023. SAVE was a really valuable plan, so a lot of borrowers switched into SAVE when it became available in October 2023, and then in July of 2024 after a series of challenges to the SAVE plan, a court blocked it and cited, maybe Department of Education exceeding their authority on creating that SAVE plan or certain provisions of that SAVE plan. In that there was also some uncertainty raised around or questions raised around forgiving student loans using ICR, Income Contingent Repayment, or Pay As You Earn, PAYE plan, as well. Those are collectively known as the Department of Ed created plans. So, in mid-February a court reaffirmed that injunction, so leaving it in place, but also with some strong words, essentially said the Department of Education doesn’t have any authority to offer a plan like SAVE or offer forgiveness under Income Contingent Repayment, Pay As You Earn or Saving On A Valuable Education. So that is what the Department of Education cited as a reason for pulling down the IDR application. That also impacted Income Based Repayment and Public Service Loan Forgiveness because those were not wrapped up in the recent court injunction. Nobody’s challenging the legality of those. They were created separately by Congress. However, the application includes all of those things. They pulled that application down and supposedly they’re reworking that application to comply with this recent court injunction. They said that it will be down for at least 90 days. Who knows? One of the things that I would say is quite different this time around, I mean, we’ve had a pause in the Income Driven Repayment applications in the past, but in the past we’ve put everybody into forbearance and pushed out their recertification deadlines so people didn’t have to try to navigate re-certifying their income driven plans while there’s no application available. So this time, that’s not what’s happening. They’re almost using, it appears, in my opinion, they’re using these recertification periods to essentially move people out of these income driven plans because I don’t know what exactly is going to result out of these new applications, but it does seem like part of the goal here is to push people out of these Income Driven Repayment plans.
Jordan Benshea: So if somebody’s in an Income Driven Repayment plan but does not have to recertify right now, they just sort of hold strong?
Tony Bartels, DVM, MBA: Yeah. They can continue to make their payments on time. Whether or not those payments are going to be forgiveness eligible, particularly if your using say ICR or Pay As You Earn, that remains to be seen. I’ve heard some kind of conflicting reports on that, but based on the wording of that recent court injunction it could be likely that payments made since that ruling was affirmed in February might not be counted towards forgiveness. However, if it’s still a relatively low payment or the lowest payment that you can get, it’s a way to kind of buy yourself some time to see what’s going to be next.
Public Service Loan Forgiveness Concerns
Jordan Benshea: I’ve heard you say the word forgiveness a lot, so obviously that dovetails easily into Public Service Loan Forgiveness because that’s a big focus. With the hopes when somebody’s in PSLF, and you’ve mentioned it a little bit, but anything else that borrowers that are in PSLF or rather hoping for PSLF should know about these recent changes and how it impacts them?
Tony Bartels, DVM, MBA: Yeah. This is one that, all of these options as beneficial as they are extremely confusing. This is probably the area that I’m seeing the most confusion, is there’s a huge overlap between Income Driven Repayment and Public Service Loan Forgiveness, although they are distinct and different in many ways. So Public Service Loan Forgiveness, student loan benefit only available to those with federal student loans who make qualifying payments while working for a nonprofit or other government entity for a period of 10 years or 120 monthly payments, are eligible to have their loans forgiven tax free at the end of that 120 monthly qualifying payment period. You pretty much have to use an income driven plan to earn Public Service Loan Forgiveness, and a lot of people confuse, hey I’m in Public Service Loan Forgiveness. Well, that’s technically not true, you’re in an income driven plan and you are working towards Public Service Loan Forgiveness, and once you meet the 120 payment threshold then you can apply and have your loans forgiven under that program. So people that are working towards Public Service Loan Forgiveness are affected because the income driven plan applications are either not available or you can’t recertify your income, and if the payment they’re telling you that you’ll have now, that standard 10 year plan payment, is too high and you switch into either deferment, forbearance, or into one of the graduated or extended plans, all of a sudden now you’re not earning any more credit towards Public Service Loan Forgiveness. So we’ve essentially blocked access to a Public Service Loan Forgiveness qualifying repayment method by taking down these Income Driven Repayment applications as well.
Interacting with Loan Servicers
Jordan Benshea: Okay, so we’ve talked about how borrowers should interact with studentaid.gov, how should they be interacting with their favorite loan servicers now?
Tony Bartels, DVM, MBA: Well, very carefully. A big dose of patience, maybe even wear a helmet. The loan servicers have been one of the worst components of student loan repayment since we’ve had Income Driven Repayment. They quite often give you misleading or outright false information. I like to joke tragically that I don’t believe at least the first three things that they say. So you have to double check everything that they tell you, and you have to keep an eye on what your loan servicer account is showing you versus what you’re also seeing in your studentaid.gov portal. Oftentimes those things will show different things, your recertification period might be different, or the monthly payment that your loan servicers showing might not be the same thing that your studentaid.gov portal is showing you. So those are places to start. You’re kind of doing forensics if you will, like you’re checking. I’m looking at my loan servicer account, if it raises an eyebrow, it doesn’t quite make sense to me, I’m going to studentaid.gov, what does it say in there? If there’re differences, I’m going to start asking some questions, why are they different? Why does my student aid account show something different than my loan servicer account? I’m going to try to collect as much information as I can before I reach out to my loan servicer, because we tend to want to think that they have a good idea of what’s going on with student loans and oftentimes that’s just not the case. So, you have to be as informed as you can when you make those phone calls. Generally, the frontline folks, even if you can get to them passed the long wait times, they’re just not helpful. So I’m always, particularly veterinarians with high student loan balances who are using income driven plans, ask for a supervisor. I mean, the folks on their answering the phone on the front line are generally not equipped with the knowledge to help you navigate your $250,000 student loan balances. It’s not working well, and it hasn’t worked well over the years. If you’re getting told things that just don’t make sense and you want to double check those sorts of things, that’s where we have the VIN and VIN Foundation Student Debt Message Board area where any veterinarian or veterinary student can reach out and ask questions, even anonymously. You can research questions that you have, or you can post your own questions and we’ll work through those with you.
Paper Applications and Consolidation Advice
Jordan Benshea: Okay. So I know the studentaid.gov website mentions paper consolidation applications and I think you touched on paper, well, you did touch on paper applications earlier. I think in this day and age, the idea of doing a paper application seems just a bit odd.
Tony Bartels, DVM, MBA: Yeah.
Jordan Benshea: That’s really the way to go. It seems like so much more work for both sides, but is there value there? Like, what might be some of the reasons that it’s worth doing a paper consolidation application right now?
Tony Bartels, DVM, MBA: Yeah. It’s odd to me that they chose to keep that particular application available. They specifically mentioned that on studentaid.gov. They say that they removed all access both electronically and via paper for the IDR applications, but they allowed the consolidation application via paper to still exist? I would not.
Jordan Benshea: I mean, so they can just say it got lost in the mail.
Tony Bartels, DVM, MBA: I mean, well, they’re going to do that anyway, so…
Jordan Benshea: So can you submit it online when you, I mean, I guess no, because you literally have to. I was wondering if you could like print it and then scan, I don’t know. I’m just trying to, the idea of it seems so antiquated at this point.
Tony Bartels, DVM, MBA: Yeah, so a lot there, but it does bring up a lot of different points to cover. So first I would not submit a consolidation right now. I cannot think of a very good reason for anyone to submit a consolidation during this particular period of uncertainty. So we use consolidation loans strategically, particularly for new graduates. Ross has a class, a pretty large class that graduates in January, so there are some new grads for 2025 already. I would hold off on those submitting any kind of consolidation application, at least for the time being. You do have a 6 month grace period after you graduate where you don’t have to make payments on your student loans. Hopefully by the time that grace period is over we’ll see an income driven application back available, but particularly because some of the benefits that we saw for consolidating in the past are not quite there or they’re also wrapped up in some uncertainty right now with the recent court ruling, so there’s not a great reason to submit a consolidation application directly into this uncertainty, and particularly as you pointed out, with a paper application. So paper applications, you can submit them in two ways. You can actually fill them out and create a PDF out of them and submit them directly to a loan servicer electronically, although it can be very difficult to get some kind of confirmation that that application is received that way. So if you do try that, you definitely want to call or follow up with an email, get some kind of electronic or written confirmation that they did in fact receive that application. The other way that you can submit that is to fold it up, put it in an envelope, and send it via post mail. So old school, but if you’re going to do that pay a couple of extra bucks and send it as certified mail, because if you do, anything you send certified mail, you do get a receipt, a kind of confirmation of somebody on the other end received that application so you can prove that, even without the loan servicers help. So in that respect, it might be beneficial if you are going to submit an application via paper, that you do it via certified mail, because then you can get that feedback from that delivery.
Jordan Benshea: Okay, so what other important, I mean, the idea that there is even more is just overwhelming, but what are the other important changes at this point?
Tony Bartels, DVM, MBA: I know, and at this point it feels like it’s a full-time job just to manage your student loans, and that’s ridiculous. That’s really part of the tragedy of a lot of this is, this is not meant to be this complicated, and we seem to want to just continue to make it more complicated.
Documenting and Managing Your Loans
Tony Bartels, DVM, MBA: I mean, you have to document everything you can right now. So we’re in a period of short term damage control where we’re trying to just make sure that our loans are not derailing our overall financial plans and goals. But at the end of all of this uncertainty we’re going to have to try to put the pieces back together. Ideally, what does that mean? We’re going to try to recapture as much or any forgiveness credit that we possibly can just in case we can use it down the road. For the people that are working towards Public Service Loan Forgiveness, that’s even more important. Some of the most heart wrenching cases that we’re helping right now are people who are literally at 119 out of 120 qualifying Public Service Loan Forgiveness payments trying to get that last one. It’s just maddening to see that the whole system has been kind of turned off to prevent something like that. That just seems mean, but we got to be able to persist and try to document, hey I’ve done everything that’s been required of me here, I’ve done what the law says I need to do, and at some point the door will open, maybe just a little bit of a crack where you can get that last payment document and you can finally have the rest of your loan balance forgiven. So that and everything in between is what you’re trying to make sure that you have adequate paper trail confirmation of, documentation of what you were trying to do, what you intended to do, what your loan servicer has been preventing you from doing so we can try to go back and fix some of this when that door does open back up.
Staying Updated and Final Thoughts
Jordan Benshea: Okay, so where should colleagues be going for updates, because clearly they need to be kept up to date on all of these changes.
Tony Bartels, DVM, MBA: Yeah, I mean, of course you have to check studentaid.gov, ed.gov, but they’ve been very reluctant to release any kind of information, at least information that’s helpful to the borrower. The press, we’ve seen some pretty good reporting out of the New York Times and the Washington Post on what’s coming down the pipeline. Sometimes we get some leaks of what they’re thinking and where things are headed. When we get information too, from the places where we’re able to find some information, sometimes sooner before it is public, then later, we’ll put it on the VINFoundation.org website. Usually we’ll post some kind of blog or notice there that talks about what we know or what you can be doing. The Student Debt Message Boards on VIN and VIN Foundation is a great place to see what’s going on. There’s tons of veterinarians that are posting in there. Every day veterinarians are like, hey, this is what my loan servicer told me today, is this correct? So it kind of gives you an idea of what’s going on and some of the things that you might hear or see going on out there, but you’re going to have to look in a lot of different places. Unfortunately, that also means that there’s going to be a lot of not great information too that you come across. Uncertainty begets uncertainty it appears, so we have to check those sources, particularly of where that information’s coming from, and then assess the likelihood that it’s accurate or not or double check that with somebody that is likely to know.
Jordan Benshea: Okay. We’ll put in the episode notes everything Tony mentioned and additional resources that we’re working on. Obviously listen to the podcast, make sure you’re signed up to get updates from the VIN Foundation website. Is there anything else that our listeners need to know about this news?
Tony Bartels, DVM, MBA: Yeah, I’ve been trying to be as optimistic as possible here. I mean, I know it feels crazy. It feels wrong at some levels. Like I said earlier, just feels mean. We’ll get through this. We’ve seen the pendulum swing in a lot of different directions with student loans. It’s been swinging particularly fast lately. It goes from one end to the other, and right now we’ve swung pretty quickly to a side that’s not very borrower friendly. Hopefully it’ll start swinging back the other way, but it does tend to swing both directions. So, document what you can, do what you need to do to navigate this particular period of uncertainty, but we’ll get through this and we’ll figure out what’s on the other side once we see, again, that door crack open a little bit to get back to something that resembles normal.
Outro
Jordan Benshea: Okay. Well as always, Tony, thank you for your time and your relentless, tireless effort in keeping everybody up to date and helping us figure out what’s going on. Thanks everyone for being here and listening, really appreciate it.
Tony Bartels, DVM, MBA: Yep. Well, thank you Jordan, and please everyone feel free to reach out if you have any questions or you’re hearing anything on your student loans that doesn’t quite make sense. We’re here to help.
Jordan Benshea: Absolutely. We’re here to help. Thanks all. Thank you for joining us for this episode of the Veterinary Pulse. Please check the episode notes for additional information referenced in the podcast. If you enjoyed this podcast, please follow, subscribe and share a review. We welcome feedback and hope you will tune in again. You can find out more about the VIN Foundation through our website, VINFoundation.org, and our social media channels. Thank you for being here. Be well.
