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Student-loan forgiveness just got more complicated.
President Donald Trump’s Department of Education quietly updated its guidance on student-loan forgiveness for borrowers on income-based repayment plans, which give enrolled borrowers monthly payments based on their income and family size with the promise of forgiveness after 20 or 25 years.
According to Federal Student Aid data, just under 2 million borrowers were enrolled in IBR as of the second quarter of 2025.
A notice posted on FSA’s website said that ongoing litigation with former President Joe Biden’s SAVE plan is preventing the administration from processing IBR forgiveness.
“Currently, IBR forgiveness is paused while our systems are updated to accurately count months not affected by the court’s injunction. IBR forgiveness will resume once those updates are completed,” the notice said.
The SAVE plan, which allowed for cheaper monthly payments and a shorter timeline to debt relief, has been blocked since July 2024. Forgiveness through other repayment plans, including income-contingent repayment, was also blocked due to the court order. However, the court order did not include IBR, which falls under a different congressional statute.
The department’s deputy press secretary Ellen Keast told BI that the IBR relief pause is to “comply with ongoing court injunctions.”
“Legal IBR discharges will resume as soon as the Department is able to establish the correct payment count,” Keast said. “For any borrower that makes a payment after they became eligible for forgiveness, the Department will refund overpayments when the discharges resume.”
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Keast referred to a SAVE provision that allowed certain forbearance periods to count toward loan forgiveness. She said that while the court does not prevent relief through IBR, it impacts the types of forbearances that can be counted toward IBR relief, requiring the department to pause the discharges until it can adjust payment counts.
The department did not comment on when the pause will be lifted. It comes at a precarious time for millions of borrowers — the department is restarting interest on SAVE borrowers’ accounts beginning August 1, meaning their balances will once again start growing after a year on pause.
To prevent balance growth, the department recommended that enrolled SAVE borrowers switch over to an IBR plan to begin making payments again.
Trump’s spending bill, which he signed into law on July 4, eliminated existing income-driven repayment plans and replaced them with two options: a standard repayment plan and a new Repayment Assistance Plan that allows for forgiveness after 30 years. Those plans aren’t set to go into effect until July 2026. Since the bill also eliminates the SAVE plan, the department said borrowers should enroll in IBR in the meantime.
Collections on defaulted student loans also restarted in May after a five-year pause, and the department said that wage garnishment will begin later this summer.
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