The U.S. Department of Education corrected a court filing after incorrectly stating that five student-loan borrowers in an ongoing lawsuit had most recently reported $0 in income.
The correction was filed Aug. 17 in the U.S. District Court for the District of Columbia in the case Havens et al. v. U.S. Department of Education et al. The agency said the error came from technical problems with its National Student Loan Data Service database, which resulted in incorrect income information being reported to the court.
Education Department did not immediately respond to Benzinga’s request for comment.
Why The Borrowers Are In Court
The case centers on borrowers seeking access to benefits under the Saving on a Valuable Education, or SAVE, repayment plan, which grew out of the earlier Revised Pay As You Earn, or REPAYE, plan. REPAYE was an income-driven repayment program that tied monthly payments to a borrower’s income, while the 2023 SAVE rule renamed REPAYE and changed several of its terms.
The dispute over the borrowers’ reported incomes arose later in the case. The Education Department previously told the court that four of the five borrowers had most recently reported incomes of $0. The borrowers disputed that claim, and the department subsequently acknowledged that the information was incorrect and filed corrected documents.
In the corrected filing, the Education Department said the error stemmed from technical problems with its National Student Loan Data Service database. The agency said a 2024 system update removed some older information, meaning certain borrower income data was no longer retained.
Education Department loan analyst Anthony Lowery said, “I was not aware that NSLDS records a borrower’s income as $0 when the system has no data,” reported Business Insider.
Separately, borrowers have reported other repayment-system problems, including inaccurate bills and erroneous past-due notices, according to the report.
SAVE Borrowers Face A Wider Repayment Shift
The filing comes as millions of borrowers are being moved away from SAVE following the program’s legal and regulatory collapse. In June, more than 300,000 borrowers had already exited SAVE, while millions remained enrolled ahead of deadlines to choose new repayment plans. Borrowers who failed to move could be automatically placed into plans with potentially higher monthly payments.
The transition accelerated in July as the broader federal student-loan overhaul took effect. The new Repayment Assistance Plan, or RAP, became one of the replacement options for eligible borrowers, with payments generally ranging from 1% to 10% of income and remaining balances potentially eligible for forgiveness after 30 years.
The shift follows the earlier court decision that ended SAVE. More than 7 million borrowers were expected to choose new repayment plans, with loan servicers beginning to send transition notices July 1 and generally giving borrowers 90 days to make a selection.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image Credit: Susan Tompor via Imagn Images
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