A major student loan forgiveness program has resumed after being on hold for several months.
In the past week, borrowers on income-driven repayment plans have begun receiving emails from the Department of Education confirming that they’ve reached the required payment threshold and are now eligible for loan forgiveness.
Multiple emails reviewed by Business Insider carried the subject line: “You’re eligible to have your student loan(s) discharged.” The messages stated that the department is coordinating with the borrower’s loan servicer to implement the relief “over the next several months,” and that discharge information will be sent to the servicer after Oct. 21.
Income-driven repayment plans set monthly student loan payments based on a borrower’s earnings, with forgiveness available after 20 or 25 years. According to Federal Student Aid data, about two million borrowers were enrolled in such plans as of the second quarter of 2025. The department had temporarily halted relief under these programs since July, citing the need to verify payment records.
“Your loan servicer will notify you if and when your IBR discharge has been processed,” the email reads. “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.”
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Borrowers who wish to decline the IBR loan relief have until October 21 to notify their loan servicer and indicate they do not want the forgiveness. The Department of Education noted in its email that some may choose to opt out to avoid potential state tax obligations, but warned that those who do must continue making regular loan payments.
Pressure is mounting to complete student loan forgiveness before year-end, as a 2021 provision in the American Rescue Plan that made debt relief tax-free is set to expire. Borrowers who receive forgiveness after January 1, 2026, could face thousands of dollars in tax liabilities.
The American Federation of Teachers, representing members on IBR plans and Public Service Loan Forgiveness, filed a complaint in September calling on the Department of Education to cancel loans for borrowers who have met their payment requirements before the relief becomes taxable again.
As IBR processing ramps up, the Trump administration continues efforts to restrict future loan forgiveness and revamp student repayment programs. The Department of Education wrapped up the first week of discussions on these changes on Oct. 3 under President Donald Trump’s so-called “big beautiful” spending law, which proposes ending current income-driven repayment plans and replacing them with two less-generous alternatives.
The administration is also broadening the scope of its ombudsman’s office to educate borrowers on repayment options, signaling a shift away from debt relief initiatives. This move follows the department’s decision to resume collections on defaulted student loans in May, ending a five-year suspension.
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“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,” stated by James Bergeron, acting head of Federal Student Aid, in a September statement, quoted by BI.