After months on pause, a key student-loan forgiveness program is back.
Over the past week, student-loan borrowers on income-based repayment plans have started to receive emails from the Department of Education notifying them that they’ve met the payment threshold and qualify for debt cancellation.
The emails, multiple of which were reviewed by Business Insider, had the subject line: “You’re eligible to have your student loan(s) discharged.” It said that the department is working with the borrower’s servicer to process the relief “over the next several months,” and the department will send the borrower’s discharge information to the servicer after October 21.
Income-based repayment plans give borrowers monthly payments intended to be affordable based on income, with the promise of loan forgiveness after 20 or 25 years. As of the second quarter of 2025, 2 million borrowers were enrolled in IBR, per Federal Student Aid data. The department has paused relief through IBR since July, saying in a Federal Student Aid notice that the department needed time to ensure payment counts are accurate.
“Your loan servicer will notify you if and when your IBR discharge has been processed,” the email said. “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 want to opt out of the IBR relief must do so by October 21 by contacting their loan servicer and saying that they are not interested in the relief. The department said in its email that a reason to opt out might be to avoid a state tax liability, but noted that those who do opt out are required to continue making payments on their loans.
There’s increased urgency for loan forgiveness to be processed before the end of the year. A 2021 provision in the American Rescue Plan that made forgiveness tax-free is expiring, meaning borrowers who receive debt relief could be on the hook for thousands of dollars in tax bills after January 1, 2026.
The American Federation of Teachers, which has members enrolled in IBR plans and Public Service Loan Forgiveness, filed a complaint in September urging the department to cancel the loans of borrowers who have met their payment thresholds before the relief is once again taxable.
While IBR processing is resuming, the Trump administration is still working to limit future forgiveness and overhaul student-loan repayment. The Department of Education concluded its first week of negotiations on the repayment changes in President Donald Trump’s “big beautiful” spending law on October 3, which included eliminating existing income-driven repayment plans and replacing them with two, less-generous options.
The administration is also expanding its ombudsman’s office to focus on informing borrowers of their repayment options with the intent of shifting the focus away from debt relief. It comes after the department restarted collections on defaulted student loans in May after a five-year pause.
“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,” James Bergeron, acting head of Federal Student Aid, said in a September statement.
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