The Education Department quietly confirmed last week that student loan forgiveness for certain borrowers under several income-driven repayment plans is paused again. And there are few details about when, exactly, processing will resume so that eligible student loans can get forgiven.
The latest development may frustrate some borrowers who have experienced a whiplash of updates when it comes to IDR student loan forgiveness under the Trump administration. Under federal law, IDR plans (which allow borrowers to make payments in accordance with their income) allow any remaining loan balance to be discharged after 20 or 25 years in repayment. But the Education Department had initially suspended discharges for all federal student loans under IDR plans last year in response to legal challenges over one of those programs, the SAVE plan. Then, after its actions were challenged in court, the department partially restarted processing IDR loan forgiveness last fall, and made assurances in public court filings that discharge processing would expand to encompass all income-driven plans except for SAVE. But now, IDR loan forgiveness appears to be on hold again for certain qualifying borrowers, according to an announcement buried in a court filing by the Education Department and Secretary of Education Linda McMahon last week.
Here’s what we know about the latest IDR student loan forgiveness pause.
Student Loan Forgiveness Is Paused For ICR And PAYE Plans
Last year, the Education Department paused student loan forgiveness processing under all four current income-driven repayment, or IDR, plans. This included the Income-Based Repayment, Income-Contingent Repayment, and Pay As You Earn plans (IBR, ICR, and PAYE, respectively). The department had argued that this was necessary in order to comply with a court order that broadly blocked the Saving on a Valuable Education, or SAVE, plan, a Biden-era program that has been subject to a legal challenge for nearly two years.
“Previous court actions paused portions of the various IDR plans,” said the department at the time in online guidance. “The latest court actions significantly affect preexisting ED rules on its loan programs and IDR plans.” The department went on to say that student loan forgiveness under IBR, ICR, PAYE, and SAVE was suspended.
But the American Federation of Teachers, a national teachers union, filed suit, arguing that such a broad pause on all IDR plans was unlawful. After some legal wrangling, the AFT and the Education Department entered into an agreement last October. In that agreement, the department committed to resuming processing student loan forgiveness under the IBR, PAYE, and SAVE plans. Loan forgiveness under SAVE remains blocked under a court injunction, and SAVE is likely to get eliminated under a recently-announced settlement agreement.
But in a court filing last week, the Trump administration indicated that student loan forgiveness remains suspended for borrowers with student loans in the ICR and PAYE plans, largely due to technical issues. And the department’s filing indicated that no borrowers in ICR or PAYE have recently had their student loans forgiven.
“Defendants note that no loans were discharged under either the Income Contingent Repayment (’Original ICR’) plan or the Pay As You Earn (“PAYE”) plan in both November and December 2025,” said the department in its filing.
The department cited technical issues in implementing forgiveness for student loans in ICR and PAYE, noting that its computer systems are “currently programmed to check eligibility for discharges under the Income-Based Repayment plan, but not any other IDR plans. ED is working on the programming for the other IDR plans,” and anticipated fixing these issues sometime in February 2026.
“ED expects that the loan servicing companies will resume mailing eligibility letters for Original ICR and PAYE after the NSLDS systems are updated in February,” said the department. “In addition, because ED eligibility letters provide an opt-out period to decline loan forgiveness, ED expects a delay between when eligibility letters are mailed and when cancellations occur.”
Student Loan Forgiveness Is Paused For Newly Eligible Borrowers Under IBR, ICR, and PAYE
The Education Department has also paused student loan forgiveness under income-driven plans for any borrower who reached their discharge eligibility threshold during or after April 2025. This includes not just the ICR and PAYE plans, but the IBR plan as well, which so far has been the only income-driven plan under which borrowers have been getting their student loans forgiven, and recently was expanded by the department under the One Big, Beautiful Bill Act. The department blamed an outstanding court order related to the SAVE plan legal challenge for the pause on discharges; that injunction prevents (for now) certain deferment and forbearance periods from counting toward student loan forgiveness under all IDR plans, when the department says is scrambling its ability to accurately count qualifying months toward a borrower’s repayment term.
“In Missouri v. Trump, the U.S. District Court for the Eastern District of Missouri enjoined the SAVE Plan Final Rule, including the revised criteria for a qualifying forbearance and/or deferment for IBR, Original ICR, and PAYE,” explained the department in its court filing. “In response, Defendants focused on processing discharges for borrowers who became eligible for loan cancellation before April 2025, the month the district court expanded its injunction, while evaluating the most effective way to resume discharges for the borrowers who would have become eligible under the SAVE Plan Final Rule criteria after the date of the injunction. Currently, the only cancellations taking place are for IBR borrowers who became eligible before April 2025. The same time limitation would apply to Original ICR and PAYE, but as described above, there are independent technical roadblocks to cancellations under those plans for now.”
The department indicated that once the pending settlement agreement to eliminate SAVE is approved by the court, the April 2025 injunction will be lifted. The settlement agreement will end the SAVE plan, but would allow certain deferment and forbearance periods that are currently enjoined to count again toward student loan forgiveness. That would then allow the department to begin processing discharges for student loans under IBR, ICR, and PAYE for borrowers who reached eligibility during and after April 2025, says the court filing.
“Until the court dissolves that injunction as part of entering final judgment, ED cannot apply the SAVE Plan Final Rule’s qualifying criteria to loans that (under those currently-enjoined criteria) would have become eligible for cancellation after April 2025,” said the department. “If and when the relevant part of the injunction is dissolved, ED will be able to begin cancelling loans for all borrowers—regardless of when they became eligible for cancellation”
The AFT has not filed a formal response to the Education Department’s latest court filing, and has not publicly indicated whether the union agrees with the administration’s interpretation of the SAVE plan injunction as applied to student loan forgiveness under the ICR, IBR, and PAYE plans.
What Borrowers Seeking Student Loan Forgiveness Can Do
Borrowers who are in one or both of the groups that are currently blocked from receiving student loan forgiveness but would otherwise be eligible for relief (i.e., they have reached the 20- or 25-year threshold to qualify for a discharge of their student loans) have limited options. Borrowers can continue to make their monthly payments under IBR, ICR, or PAYE as required, and the Education Department has affirmed in previous court filings that any excess payments made beyond the number required to qualify for a discharge should be refunded. Otherwise, borrowers can contact their loan servicer to request a temporary forbearance while they wait for their student loans to be forgiven. But keep in mind, interest continues to accrue on the balance during a forbearance, and the entire balance (once the discharge goes through) could now have significant tax consequences for borrowers.
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