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6d ago

Education Department Pauses IBR Loan Forgiveness While Updating Systems

The department says it is updating its systems to comply with court orders that affect related income-driven repayment plans

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FILE - Education Secretary Linda McMahon speaks during a Senate Appropriations hearing, Tuesday, June 3, 2025, on Capitol Hill in Washington. (AP Photo/Julia Demaree Nikhinson, File)
U.S. President Donald Trump answers questions while departing the White House on July 11, 2025 in Washington, DC.

Overview

  • The Department of Education temporarily suspended loan forgiveness under the Income-Based Repayment plan in July 2025 while it recalibrates borrower payment records.
  • Officials say the pause is not court-mandated for IBR but is needed to align forgiveness counts after injunctions halted the SAVE, PAYE and ICR plans.
  • About two million IBR enrollees who have reached the 20- or 25-year payment threshold are awaiting discharges and will receive refunds for any overpayments once processing resumes.
  • The agency has provided no timeline for resuming IBR forgiveness and advises borrowers to continue making payments, request forbearance or explore alternative repayment plans.
  • New legislation will phase out current income-driven plans by 2028 and introduce a 30-year Repayment Assistance Plan, reshaping future pathways to loan cancellation.