- Student loan forgiveness under the Income-Based Repayment (IBR) plan resumed in October 2025 for about 2 million borrowers.
- The program restart comes after a pause since July to verify payment counts and address legal issues related to earlier plans.
- Borrowers who have made payments for 20 or 25 years are now receiving notifications about their loan discharge.
- Recent legislative changes limit federal repayment options, with IBR remaining one of the few paths to loan cancellation.
- The provision making forgiven student debt tax-free ends December 31, 2025, after which cancelled debt may result in tax bills.
The federal government restarted student loan forgiveness for borrowers in the Income-Based Repayment (IBR) plan in October 2025. Around 2 million people qualify for this program, which had paused in July while officials checked records and responded to court decisions.
According to Federal Student Aid data, those enrolled in IBR who have made 20 or 25 years of payments are now receiving discharge emails. Scott Buchanan, executive director of the Student Loan Servicing Alliance, told CNBC that borrowers have started to get notifications stating “You’re eligible to have your student loan(s) discharged.”
Consumer advocates, including Persis Yu and Betsy Mayotte, confirmed they have heard from borrowers approved for relief. Borrowers can typically expect their loans to be cancelled within two weeks, but some cases may take longer. Anyone wishing to opt out of the forgiveness must contact their servicer by October 21.
These changes follow recent Congressional approval of what President Trump called a “big beautiful bill,” phasing out several repayment plans and leaving IBR as a main route to loan forgiveness, according to higher education analyst Mark Kantrowitz. James Bergeron, acting head of Federal Student Aid, stated that the administration is implementing updates to improve how loans are serviced.
Officials are negotiating new repayment options to replace current income-driven plans with less generous alternatives. Additionally, debt forgiveness is tax-free until December 31, 2025, due to a rule from the 2021 American Rescue Plan. After that, recipients of loan forgiveness may owe thousands of dollars in taxes.
Not all borrowers have seen their debt forgiven. The American Federation of Teachers filed a lawsuit in March, saying the Education Department limited borrowers’ rights. Meanwhile, tens of thousands are waiting for Public Service Loan Forgiveness, with a backlog of over 74,000 cases as of late August. Loan collections on defaulted federal loans resumed in May, and the department has expanded its ombudsman office to better inform borrowers of their repayment options.
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