Trump Administration Restarts Income-Based Loan Forgiveness After Legal Pressure

After months of uncertainty, the Trump Administration has resumed student loan forgiveness under the Income-Based Repayment (IBR) program, providing relief to borrowers who had been left in limbo after the program was paused in July.

The IBR plan allows borrowers to have remaining balances canceled after 20 or 25 years of qualifying payments. Earlier this year, the Department of Education (DOE) halted discharges, citing system updates tied to court injunctions affecting other income-driven repayment programs, even though IBR itself remained statutorily authorized. The pause left many borrowers, including educators, nurses, and public servants, uncertain whether forgiveness would ever resume.

AFT had filed suit against the Department of Education, arguing that the freeze was unlawful and unfair to borrowers who had faithfully met all the requirements. In the face of legal pressure, the administration reversed course this month and began sending emails to borrowers confirming eligibility and instructing servicers to process discharges. According to reports, the DOE expects most discharges to be processed within weeks after an opt-out deadline of Oct. 21.

"We stood up to them in court and demanded that they follow the law," said AFT President Randi Weingarten, adding that the reversal shows "the clearest sign yet that borrowers' rights can win out over this lawless and reckless ideological scheme."

The restart is a significant win, but it does not resolve broader challenges in the student debt landscape. Many borrowers under other income-driven repayment plans (like SAVE, PAYE, or ICR) are still facing delays or legal barriers tied to court rulings. Moreover, Congress's new student loan reforms could phase out some existing plans in favor of a new "Repayment Assistance Plan" (RAP), which would require 30 years of payments for forgiveness, making IBR's reinstatement even more urgent for those nearing the finish line.

For many educators who have carried heavy debt burdens for years, the reinstatement of IBR forgiveness is a long-awaited reprieve, and a reminder that holding the government accountable through legal action can yield tangible results.

If you are an AFT member unsure about how these changes affect your student debt repayment and forgiveness options, we encourage you to attend one of the upcoming national webinars.