A significant development in student loan forgiveness has emerged as the Department of Education has resumed a crucial program that had been paused for months. Student-loan borrowers enrolled in income-based repayment (IBR) plans are now receiving notifications confirming they qualify for debt cancellation.
These emails, reviewed by media reports, feature the subject line: “You’re eligible to have your student loan(s) discharged,” and indicate that the department is collaborating with loan servicers to process discharges over the coming months. With an emphasis on improving accuracy after an earlier pause in relief since July, borrowers can expect discharge information to be sent to their servicers after October 21.
Income-based repayment plans are designed to ensure monthly payments are manageable, with the promise of forgiveness after 20 or 25 years. According to Federal Student Aid data, approximately 2 million borrowers were enrolled in IBR plans as of the second quarter of 2025.
The emails to borrowers also inform them that while most discharges will be processed within two weeks, some may experience delays. Additionally, if borrowers wish to opt out of the relief, they must do so by October 21. Reasons for opting out might include avoiding potential state tax implications, though those who choose this route must continue making payments.
There is an increased urgency for processing loan forgiveness due to a provision from the 2021 American Rescue Plan, which made forgiveness tax-free but is set to expire, leading to possible tax liabilities for borrowers receiving debt relief after January 1, 2026. The American Federation of Teachers has even filed a complaint urging the department to expedite cancellations for borrowers who meet payment thresholds before the expiration makes relief taxable again.
While these developments signal progress towards assisting borrowers, the current administration under President Trump is focused on limiting future forgiveness options and overhauling repayment structures. Recently, negotiations have commenced regarding changes to repayment plans, which include the elimination of existing income-driven options in favor of two less favorable alternatives. The Department of Education is also expanding its ombudsman’s office to encourage awareness of repayment options while shifting focus away from debt relief.
James Bergeron, acting head of Federal Student Aid, expressed the administration’s commitment to enhancing the servicing of student loans to better serve borrowers and taxpayers, contrasting with previous administrations’ heavy focus on loan forgiveness.
As students and borrowers navigate these changes, the recent resurgence of the student-loan forgiveness program brings hope for relief to millions grappling with educational debt.