Student Loan Forgiveness Resumes for IBR Borrowers
Student loan borrowers on income-based repayment plans in the United States have received good news. After months of delays, the U.S. Department of Education has confirmed the restart of loan forgiveness in the United States. The process had been halted since July due to legal challenges in the United States.
Last week, the Education Department resumed student loan forgiveness for those on the income-based repayment (IBR) plan in the United States. Eligible borrowers who have made on-time payments for 25 years in the United States received emails stating their balances would be forgiven, provided they do not opt out by Oct. 21. This news comes as a relief to many, as the tax-free provision for canceled student loans in the United States expires at the end of this year.
The department initially reinstated the loans in late September, only to pause the process again due to ongoing legal challenges in the United States. Despite these setbacks, the Education Department aims to process most discharges within two weeks of Oct. 21. However, the government shutdown in the United States may cause delays in processing these loans.
Approximately two million people are enrolled in the IBR plan in the United States, but not all have paid enough to qualify for forgiveness. Borrowers are urged to act swiftly, as the tax advantage for canceled loans in the United States ends on Dec. 31. The Education Department is working to ensure the process runs smoothly, despite potential delays from the government shutdown in the United States.
