After months of halted progress, student loans tied to the federal Income-Based Repayment (IBR) program are once again being reviewed for forgiveness. The Department of Education has begun processing relief for nearly two million borrowers following an extended pause that began in July.
According to The U.S. Sun, impacted individuals were recently notified of their eligibility by email, signaling the restart of a process that had been delayed by technical updates and legal reviews. The announcement comes during a broader return to repayment obligations nationwide, marking a significant step in the federal government’s ongoing management of long-term student debt.
SAVE Plan Delays Lifted As Emails Alert Borrowers
The delay in processing forgiveness was largely due to updates in loan tracking systems and ongoing legal challenges related to the SAVE Plan (Saving on a Valuable Education), an initiative intended to restructure repayment options and improve long-term relief for borrowers. According to the department, the pause was necessary to ensure accuracy across complex payment histories.
Now, borrowers who have been making payments under IBR for decades are finally seeing movement. In the past week, many received emails with a subject line that read:
“You’re eligible to have your student loan(s) discharged,” according to Business Insider.
The email went on to say:
“Your loan servicer will notify you if and when your IBR discharge has been processed.”
It added:
“It may take some time for your loan servicer to process your discharge and for your account to reflect this change. Most borrowers will have their discharge processed within two weeks, but for some borrowers, processing could take more time.”
Borrowers who wish to decline forgiveness—primarily to avoid state tax liabilities—must notify their loan servicer by October 21. While student loan forgiveness is currently exempt from federal tax under the American Rescue Plan Act, some states still consider discharged debt as taxable income. Refusing forgiveness doesn’t erase the debt; it simply reactivates the obligation to make monthly payments on student loans.
Forgiveness Comes Ahead Of Key Tax Deadline
This wave of loan relief arrives just before a significant fiscal cutoff. Under the American Rescue Plan Act of 2021, student loan forgiveness is shielded from federal income tax—but only until December 31, 2025. Once that provision expires, borrowers who receive cancellations could once again owe taxes on the discharged amounts, potentially amounting to thousands of dollars.
IBR plans are designed to make monthly payments more manageable by calculating them based on income and family size rather than total loan balance. Borrowers become eligible for forgiveness after 20 or 25 years of qualifying payments, depending on the specific terms of their plan. As of the second quarter of 2025, approximately two million Americans were enrolled in IBR programs, according to Federal Student Aid data.
With rising interest and resumed payments, this opportunity comes at a pivotal time. Some borrowers are facing increases of up to $300 per month. In parallel, others missed a September deadline to claim as much as $5,000 in debt relief from a $9 million fund—another reminder of the complexity and time-sensitivity surrounding current relief programs.
Trump Administration’s Role And System Reforms
The suspension of IBR forgiveness earlier this year followed policy shifts initiated under the Trump Administration, which took a notably different approach from its predecessor. While the Biden-era strategy emphasized broad-based forgiveness and support through programs like SAVE, Trump’s education policy leaned into reform and repayment restructuring.
Forgiveness under IBR resumed only after system updates and legal clearances tied to prior administrative decisions. As noted in a recent statement, James Bergeron, acting head of Federal Student Aid, said:
“Unlike the previous Administration’s focus on loan forgiveness, the Trump Administration is taking action to implement meaningful and necessary enhancements to the way student loans are serviced to better serve borrowers and American taxpayers.”
The One Big Beautiful Bill Act, a proposal stemming from that era, seeks to eliminate current Income-Driven Repayment options and replace them with two streamlined plans—both of which would increase monthly payments and extend the timeline for forgiveness eligibility.
At the same time, the Department of Education resumed collections on defaulted student loans in May, ending a five-year suspension. The department is also expanding its ombudsman’s office to focus on borrower education, shifting the conversation away from forgiveness toward repayment responsibility.
