Department Of Education Suspends Student Loan Forgiveness Under IBR

The Department of Education has suspended student loan forgiveness under the Income-Based Repayment plan, or IBR. The IBR plan is one of several income-driven repayment plan programs offered to borrowers, and is the only current plan not subject to any legal challenge or court injunction.

“Currently, IBR forgiveness is paused while our systems are updated,” announced the department in updated guidance on pending court challenges issued earlier this month. “IBR forgiveness will resume once those updates are completed.”

The department’s announcement corroborates previous statements by former department officials. And it confirms what some borrowers who had reached the threshold for student loan forgiveness – but didn’t get a discharge – had already suspected. Here’s what we know, and what borrowers can do.

Student Loan Forgiveness Under IBR Is Not Blocked By Any Court

Like all income-driven repayment plans, IBR uses a formula tied to a borrower’s income and family size to determine a borrower’s monthly payment requirement. Payments are then recalculated every 12 months. Borrowers who haven’t paid off their student loans in full by the end of their repayment term – which is 25 years for borrowers who took out their loans prior to July 1, 2014, and 20 years for those who took out loans on or after that date – would be entitled to student loan forgiveness.

But IBR is unique in that it is not directly subject to any legal challenge right now. Last year, a group of Republican-led states filed a lawsuit to stop the SAVE plan, a new income-driven repayment option created by the Biden administration in 2023. A federal appeals court then issued an injunction blocking SAVE last summer. The court’s decision, as well as a subsequent ruling issued earlier this year, called into question whether student loan forgiveness was authorized under the federal statute that governs SAVE. This same statute also underlies two other income-driven plans – ICR and PAYE. But IBR was created separately by Congress, and the IBR statute expressly authorizes student loan forgiveness at the end of the 20- or 25-year repayment term. The appeals court acknowledged this in its recent rulings.

As a result, student loan forgiveness under SAVE, ICR, and PAYE is blocked. But student loan forgiveness under IBR is not. The department confirmed this in its updated guidance on the pending litigation that was issued earlier in July.

“Forgiveness as a feature of the SAVE, PAYE, and ICR Plans is currently paused, because those plans were not created by Congress,” said the department. “Generally, ED can and will still process loan forgiveness for the IBR Plan, which was separately enacted by Congress.”

But despite this, the department is not processing student loan forgiveness under IBR. And the department’s announcement confirms accusations leveled by a former official with the Office of Federal Student Aid, who suggested in a declaration filed in a separate legal challenge over mass layoffs at the department that the Trump administration might be violating the law by blocking debt relief under IBR.

“It is my understanding that as of April or early May 2025, federal student loan borrowers who are eligible for income-based repayment cancellation were still not having their loans cancelled—a process that has been paused since July 2024—despite the statutory obligation to do so,” said the official. The same official also indicated that the department was having difficulty updating qualifying student loan forgiveness payment counts.

IBR Student Loan Forgiveness Pause Is Related To Court Injunction, Says Department

The Department of Education provided only a vague explanation for the suspension of student loan forgiveness under IBR, suggesting it was paused “while our systems are updated to accurately count months not affected by the court’s injunction” directed at the SAVE plan.

The department may be referring to a federal appeals court ruling earlier this spring that expanded the court’s injunction blocking SAVE to include the entire underlying regulation that governs the SAVE plan. Some elements of these regulations also indirectly impact other income-driven repayment plans, including IBR. For example, the regulations allowed for certain deferment and forbearance periods to count toward student loan forgiveness under all income-driven plans (ICR, PAYE, SAVE, and IBR).

Nevertheless, nothing in the recent court decisions associated with the SAVE plan legal challenges requires the department to halt student loan forgiveness under IBR. And no court has ordered the department to suspend discharges under IBR – something that is expressly required under statutes previously enacted by Congress.

Student loan borrower legal groups have previously accused the Trump administration of using the recent court orders involving the SAVE plan to justify policy decisions that harm borrowers.

“Instead of fixing the broken student loan system, Secretary McMahon is choosing to drown millions of people in unnecessary interest charges and blaming unrelated court cases for her own mismanagement,” said Student Borrower Protection Center executive director Mike Pierce in a statement earlier this month after the department announced that it would resume charging interest on student loans covered by the SAVE plan forbearance. Borrowers subject to the forbearance have had no interest accrual on their loans since the injunction was first announced last summer.

Suspension Of Student Loan Forgiveness Comes Amid Other Program Disruptions

The suspension of student loan forgiveness under IBR comes as the federal student loan repayment system is experiencing significant upheaval and turmoil. More than 1.5 million income-driven repayment applications remain stuck in a massive backlog as the Department of Education makes slow progress after it suspended processing for several months (which department officials also blamed on the SAVE plan injunction). Despite this backlog, earlier this month the department announced that interest on student loans covered by the SAVE plan forbearance would resume in August, and encouraged nearly eight million additional borrowers to apply to change to a different repayment plan – specifically, to IBR.

“The Department urges all borrowers in the SAVE Plan to quickly transition to a legally compliant repayment plan – such as the Income-Based Repayment Plan,” said the department in its announcement. “Borrowers in SAVE cannot access important loan benefits and cannot make progress toward loan discharge programs authorized by Congress.”

Meanwhile, more changes will be coming soon. Earlier this month, President Trump signed the so-called “Big, Beautiful Bill” into law. The legislation makes changes to the IBR plan and will result in the eventual repeal of the ICR, PAYE, and SAVE plans, while creating in their place a new income-driven option called the Repayment Assistance Plan, or RAP. IBR will still be available for current borrowers in repayment, allowing for student loan forgiveness after 20 or 25 years. But RAP won’t allow for loan forgiveness until the borrower has been in repayment for 30 years.

Borrowers currently in IBR who have reached the threshold for student loan forgiveness, but are unable to receive a discharge due to the Department of Education’s suspension, have limited options. They can continue to make payments under IBR and hope that they can be refunded for those excess payments once their student loans are discharged (any payments made in excess of the 240 or 300 monthly payments required for IBR loan forgiveness should be refundable). Or, they can contact their loan servicer to request a forbearance to suspend payments while they wait for a discharge. But interest would continue to accrue on their balance during the forbearance period, and it is unclear how long the IBR student loan forgiveness pause will last.