Key Points
- The Department of Education increased processing of Income-Driven Repayment applications in July, cutting the backlog by more than 100,000.
- Public Service Loan Forgiveness buyback processing also rose, but the backlog continued to grow amid high application volume.
- Concerns remain about the Department’s ability to manage workloads as layoffs loom and repayment changes approach.
The Department of Education reported a major increase in processing Income-Driven Repayment (IDR) applications in July, according to the latest status report (PDF File).
The agency processed 304,844 applications, up from 186,731 in June. As a result, the IDR backlog fell to 1,386,406, down from more than 1.5 million at the end of June. It's also likely that the backlog drop includes some of the SAVE plan applications that are slated to be cancelled.
The backlog reduction for IDR applications will likely be welcome news to borrowers waiting for decisions on repayment plans that could lower monthly payments or lead to eventual loan forgiveness.
However, for borrowers waiting for Public Service Loan Forgiveness (PSLF) buyback, the news is not as great. While application processing increased, the backlog significantly increased.
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@thecollegeinvestor The latest Dept of Education IDR and PSLF buyback processing report just posted for August 2025 and here’s what we know. #studentloans #studentloandebt #pslf ♬ original sound - The College Investor
IDR Processing Updates
The agency processed 304,844 applications in July 2025 - the most processed since status reports were required by a lawsuit challenging the Department of Education's handling of IDR plans. As a result, the IDR backlog fell to 1,386,406, down from more than 1.5 million at the end of June, another low.
This marks one of the strongest single-month reductions since April, when just 79,349 applications were decided. The improvement follows months of uneven performance, in which gains made in May were erased by June’s slowdown.
IDR Processing Backlog | ||||
|---|---|---|---|---|
Month | April | May | June | July |
Processed | 79,349 | 285,694 | 186,731 | 304,844 |
Backlog | 1,985,726 | 1,582,641 | 1,511,504 | 1,386,406 |
PSLF Buyback Requests Rise
The Public Service Loan Forgiveness (PSLF) buyback program also saw an increase in completed requests during July. The Department processed 3,280 cases, up from 2,224 in June. However, still slightly lower than the May processing of 3,312.
But unlike IDR, the PSLF buyback backlog did not shrink. Pending cases climbed to 72,730, an increase of more than 7,000 from the prior month.
Processing remains slow. Borrowers have reported wait times of ten months, far longer than the two- to three-month average seen in 2024. A small internal team handles these requests without assistance from loan servicers, limiting how many can be decided each month.
While the processing gains are nice to see, a lot of effort will be needed to clear the backlog.
PSLF Buyback Processing Backlog | ||||
|---|---|---|---|---|
Month | April | May | June | July |
Processed | 1,472 | 3,312 | 2,224 | 3,280 |
Backlog | 49,318 | 58,716 | 65,448 | 72,730 |
Staffing Changes And Future Processing
The July report comes as the Department prepares for significant changes in staffing and repayment programs. A Supreme Court decision earlier this year cleared the way for planned layoffs, part of a broader restructuring under the Trump administration. The reductions are expected to impact all workload associated with loan forgiveness.
At the same time, the Department is preparing for the end of the SAVE plan and the launch of the Repayment Assistance Plan (RAP) in 2026. Borrowers currently in forbearance under SAVE may want to switch to other repayment options in the coming months, adding to the processing burden.
While the July numbers for IDR are encouraging, they only represent a single month’s data (just July 2025). If staff reductions proceed as planned, maintaining or improving this pace may prove challenging.
For PSLF buyback applicants, the growing backlog suggests that without additional resources, even incremental gains in processing speed may not be enough to keep up with demand.
What Borrowers Need To Watch
Borrowers waiting on IDR applications or PSLF buyback requests should monitor the Department’s monthly reports to track changes in processing rates and backlog size.
Public service workers pursuing PSLF buyback should be prepared for long wait times and keep documentation of qualifying employment and payment history. For borrowers who are less than 10 payments away from the 120 mark, it could make sense to switch plans to an active repayment plan and pursue PSLF the "old fashioned way" of simply getting qualifying payments.
With the Department balancing a high workload, reduced staffing, and upcoming policy changes, borrowers could face shifting timelines in the months ahead. The latest figures show that progress is happening but also that improvements in one area do not guarantee faster results across all programs.
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Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.