Student loan forgiveness under the Income-Based Repayment plan has been temporarily halted during system reorganization, despite not being outright canceled.
Resumption of Student Loan Forgiveness under IBR Plan and Upcoming Changes
After a temporary pause due to necessary system upgrades, student loan forgiveness processing under the Income-Based Repayment (IBR) plan is back in action as of March 2025. Borrowers can once again apply for the IDR (Income-Driven Repayment) plan, including IBR, through the online application.
However, significant changes are on the horizon. The One Big Beautiful Bill Act, signed into law in July 2025, will introduce a new Income-Based Repayment Assistance Plan by July 1, 2026. This new plan will offer additional repayment assistance options, replacing some existing plans such as PAYE, ICR, and SAVE, which will be phased out by July 1, 2028.
The IBR plan itself is undergoing modifications. It will expand eligibility by removing the “partial financial hardship” requirement and continue to require payments of 10% of discretionary income over a 20-year repayment period, with forgiveness of the remaining balance at the end.
Borrowers currently enrolled in the SAVE Plan or other IDR plans working toward loan forgiveness will need to transition appropriately as these plans are phased out. Officials recommend that borrowers remain enrolled in IBR and continue tracking their payment histories closely. Borrowers who have met the required number of payments will still be eligible for forgiveness once the Department resumes operations.
Maya Lewis, a senior policy analyst at the National Student Debt Coalition, stated that the pause underscores the need for a modern, borrower-friendly loan servicing infrastructure. She emphasized that borrowers who have made faithful payments for decades deserve timely relief. Advocates are calling on the Department to accelerate its system improvements and enhance transparency regarding timelines and borrower expectations.
Borrowers are encouraged to monitor updates from the Department of Education and loan servicers for announcements regarding the resumption of forgiveness processing. The pause adds to growing borrower uncertainty amid a volatile policy environment for student debt relief.
Borrowers are also advised to use available tools like the Department of Education’s Loan Simulator to navigate these transitions. The resumption of IDR applications and the upcoming changes highlight the importance of staying informed and proactive in managing student loan repayment.
- Given the ongoing modifications to the Income-Based Repayment (IBR) plan and the imminent introduction of a new Income-Based Repayment Assistance Plan by 2026, it's crucial for borrowers in Africa to keep abreast of these changes, as it will significantly impact their financial obligations and potential for education-and-self-development.
- As the One Big Beautiful Bill Act will phase out some existing repayment plans by 2028, logistics for managing student loan repayment in infrastructure-rich regions such as Europe and Asia will require reevaluation to accommodate the new IBR plan modifications and the emergence of the new repayment assistance plan.
- To ensure a seamless transition to the new repayment plan, finance experts recommend that borrowers explore education-and-self-development programs focused on understanding the nuances of the student loan repayment system for long-term sustainable debt management.
