Department of Education Quietly Suspends Student Loan Forgiveness

There are an estimated 2 million borrowers who are currently enrolled in IBR. Many of them are approaching forgiveness but face delays and may still be required to make monthly payments even if they qualify for forgiveness.

 By Mitti Hicks

(Source: Black Enterprise)

The Department of Education has suspended student loan forgiveness under the Income-Based Repayment plan, widely known as IBR.

IBR is one of several income-driven repayment plans, with monthly payments that are generally equal to 15% of the borrower’s discretionary income, divided by 12. New borrowers on or after July 1, 2014, would pay 10% of their discretionary income. Under IBR, the Education Department considers the borrower’s income and family size when determining the monthly payment amount.

Payments are recalculated every 12 months. Individuals who do not repay their entire student loan within the stipulated timeframe are eligible for student loan forgiveness. Anyone who took out a loan on or after July 1, 2014, would have 25 years to repay it, while those who took out a loan before July 1, 2014, would have 20 years.

What Makes IBR Different Than SAVE, ICR, and PAYE?

Unlike SAVE, ICR, and PAYE, Congress created IBR separately. The IBR statute expressly authorizes student loan forgiveness at the end of the 20 or 25-year repayment term, which is why it remains unclear why the Trump administration is discontinuing IBR.

In 2024, a group of Republican-led states filed a lawsuit to halt income repayment plans, such as the SAVE plan, an income-driven repayment program introduced by the Biden administration in 2023. A federal appeals court issued an injunction blocking it. The court’s decision raised questions about whether student loan forgiveness was authorized under the federal statute that governs the SAVE program. Subsequently, the court blocked the SAVE, ICR, and PAYE programs.

“Forgiveness as a feature of the SAVE, PAYE, and ICR Plans is currently paused, because those plans were not created by Congress,” the Education Department said. “Generally, ED can and will still process loan forgiveness for the IBR Plan, which was separately enacted by Congress.”

However, as Forbes points out, the Education Department has not processed any student loan forgiveness under the IBR for borrowers who reach the 20- or 25-year threshold. A former official with the Office of Federal Student Aid suggested that the Trump administration could be violating the law by blocking debt relief under IBR.

“It is my understanding that as of April or early May 2025, federal student loan borrowers who are eligible for income-based repayment cancellation were still not having their loans cancelled—a process that has been paused since July 2024—despite the statutory obligation to do so,” the official stated in a declaration filed in a separate legal challenge over mass layoffs at the department. The same official also suggested the Education Department, which was recently gutted, is having difficulty updating qualifying student loan forgiveness payment counts.

What Student Borrowers Should Know

As of now, the Department of Education is claiming that the suspension of student loan forgiveness under IBR is paused “while our systems are updated to accurately count months not affected by the court’s injunction.” The Education Department is referring to the legal battle with the SAVE plan. The IBR, however, is the only program not subject to any legal challenges or court injunctions, and no court has ordered the department to suspend discharges under IBR.

There are an estimated 2 million borrowers who are currently enrolled in IBR. Many of them are approaching forgiveness but face delays and may still be required to make monthly payments even if they qualify for forgiveness. This means that new forgiveness will not be processed for now, and forgiveness may be delayed, even if borrowers reach the required payment count. It’s also likely that Interest will also still accrue.

Student loan borrowers should stay in IBR if they have it because it remains the most affordable plan. Continue to request forbearance, but keep in mind that the interest will still accrue.