More than 5 million borrowers manage their federal student loan repayments with the help of income-based repayment plans. Borrowers with federal student loans have a legal right to an income-based repayment plan but a recent report from the Consumer Financial Protection Bureau (CFPB) has found that some students are denied the opportunity to participate in these programs.

According to the CFPB, some student loan servicers are withholding access to income-driven repayment plans by failing to enroll or notify qualified borrowers. Many borrowers deal with unnecessary hurdles or rejections when they try to enroll in an income-based repayment plans by servicers who either wrongly deny their application or simply fail to inform borrowers of this option.

Seth Frotman, CFPB onbudsman, said that processing an application for an income based repayment plan should not take longer than 2 weeks to complete, but many applications are sitting in review for months. According to the CFPB, these actions leave borrowers stuck in payment plans they can’t afford and cause avoidable default on their loans.

Income-based repayment plans help borrowers manage their student loans by capping their monthly payments at a percent of their income. After 20 years of qualified payments any remaining debt is forgiven.

Typical repayment plans are more costly than income-based repayment plans and can lead to unnecessary costs and fees. Borrowers also miss out on months of qualified repayments towards loan forgiveness while they wait for their application to be approved.

Breakdowns in Loan Rehabilitation Programs Keep Borrowers Trapped in Default

Lauren Asher is the president of the Institute for College Access & Success, a nonprofit that advocates for making higher education more affordable for all Americans. She said the report from the CFPB demonstrates the importance of informing borrowers of their options for income-based repayment plans instead of pushing them toward forbearance. She said that while income-based repayments plans may not be the best option for everyone, every borrower should be aware of that option.

The report also showed that some student loan servicers don’t give accurate information to borrowers about the amount of interest that will accrue when borrowers pay in advance. They don’t always offer borrowers choices as to how their payments can be applied across multiple loans; for instance, extra payments can be applied toward high-interest loans to pay down student loan debt faster. Some borrowers also have received incorrect bills for their repayment plans, causing them to underpay on their final payments so they continued to be billed and interest continued to accrue.

The Department of Education has released guidelines for servicers, saying they must actively engage with borrowers who do not yet have complete applications.