"Department of Education Temporarily Halts Student Loan Forgiveness Under IBR Plan Amid Payment Record Updates"

The Department of Education has temporarily paused student loan forgiveness under the Income-Based Repayment (IBR) plan. This is due to the need to update borrowers' payment records, which were affected by a court injunction earlier this year. IBR forgiveness will resume once the updates are completed. Borrowers currently in blocked repayment plans can switch to IBR and have their months of payments count toward forgiveness.

The Department of Education has announced a temporary pause in the student loan forgiveness process under the Income-Based Repayment (IBR) plan. This decision comes amid ongoing legal challenges and the need to update borrowers' payment records. The pause affects approximately 2 million borrowers enrolled in IBR, a federal repayment plan that ties monthly payments to income and family size, with the promise of loan forgiveness after 20 or 25 years of payments.

According to the Education Department, the suspension is due to the need to accurately count months not affected by a recent court injunction. The department has stated that IBR forgiveness will resume once these updates are completed. However, there is no specified timeline for the resumption of the forgiveness process.

The pause in IBR forgiveness comes as the Education Department has also temporarily halted loan forgiveness under the other three income-driven plans—Income-Contingent Repayment (ICR), Pay As You Earn (PAYE), and the Save plan—due to ongoing court battles. The Save plan, which offers lower payments and a faster path to loan forgiveness, has been on hold since last summer. The courts have questioned the legality of loan forgiveness in these plans, arguing that the 1993 statute used by President Joe Biden to create the Save plan does not authorize forgiveness.

IBR, created in 2007, was spared from these legal challenges because Congress explicitly allowed loan forgiveness at the end of the repayment term. This makes IBR the only income-driven plan currently processing loan forgiveness. The Education Department has encouraged borrowers interested in loan forgiveness to sign up for IBR, especially those enrolled in the Save plan.

Starting August 1, interest will resume accruing on loans in the Save program, even though enrollees' payments remain paused by the court injunction. The pending interest accrual and the demise of the Save plan could lead to an influx of borrowers into the IBR plan. If the suspension of loan forgiveness in IBR is not resolved quickly, these borrowers could find themselves trapped in another plan without a clear path to forgiveness.

The Education Department has not provided a timeline for the resumption of IBR forgiveness, and student loan servicers have yet to receive any guidance on the suspension. Borrowers are advised to stay informed about updates and consider switching to the IBR plan if they are currently enrolled in a blocked repayment plan.

References:
[1] https://www.washingtonpost.com/education/2025/07/22/trump-administration-student-loan-forgiveness-pause-ibr-plan/