Overview
- The agreement with the American Federation of Teachers commits the Education Department to resume discharges for borrowers eligible under IBR, ICR and PAYE and to process PSLF buybacks, affecting roughly 2 to 2.5 million people.
- Borrowers who reach eligibility in 2025 will have that date treated as the discharge date for federal tax purposes, though the IRS and Treasury have the final say.
- The deal requires refunds for payments made after borrowers crossed their qualifying threshold and directs servicers to process IDR and PSLF buyback applications.
- The joint filing awaits court approval, and the department said most discharges should be processed within about two weeks after October 21.
- Scope is limited to plans that remain active, with ICR and PAYE slated for phase-out by July 1, 2028, and separate SAVE litigation still freezing progress for about 7.7 million borrowers.