Some student-loan borrowers are finally seeing the light at the end of the tunnel after years of payments.
Earlier this month, President Donald Trump’s administration began sending emails to some borrowers on income-based repayment plans notifying them that they’re eligible to have their loans discharged.
IBR plans give borrowers monthly payments based on their incomes, with the promise of forgiveness of any remaining debt after 20 or 25 years. While the Department of Education did not specify how many borrowers are eligible for this round of forgiveness, 2 million borrowers were enrolled in IBR plans in the second quarter of 2025, according to Federal Student Aid data.
“Your loan servicer will notify you if and when your IBR discharge has been processed,” the email, reviewed by Business Insider, said. “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.”
Student-loan forgiveness has been rare under the Trump administration, given its focus on overhauling repayment and shifting away from debt relief efforts. Over the summer, the Department of Education paused IBR processing to update borrowers’ payment counts, and it has also been working through a backlog of other repayment plan applications, including those for Public Service Loan Forgiveness.
Here’s what borrowers should know about the coming relief.
Who qualifies for the student-loan forgiveness
The first version of the IBR plan was created by Congress in a 2007 law and went into effect in 2009, with an updated version going into effect in 2014. The updates meant that borrowers who enrolled in the plan before July 1, 2014, had payments that were 15% of their discretionary income with a repayment period of 25 years, while those who signed up after July 1, 2014, had payments that were 10% of their discretionary income with a repayment period of 20 years.
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Borrowers are able to switch from other income-driven repayment plans to IBR plans over the course of their repayment. That means payments made before IBR went into effect count toward the forgiveness threshold.
Trump’s “big beautiful” spending legislation that he signed into law in July made some updates to IBR eligibility. It removed the requirement to be in financial hardship to enroll and expanded eligibility to some parent PLUS borrowers who took out loans to support their children’s educations.
How the government shutdown could impact relief
The government has been shut down since October 1, and federal agencies have enacted their contingency plans to ensure critical functions stay in operation. A notice posted at the top of Federal Student Aid’s website said that “information on this website may not be maintained, and inquiries may not receive a response.”
It added that borrowers “should continue to make payments on your federal student loans as scheduled.”
The forgiveness emails that IBR borrowers received said that the Department of Education will send borrowers’ discharge information to servicers after October 21, and those who want to opt out of the relief have to do so before that date. However, due to furloughed and terminated staff at the Department of Education, paperwork processing — including for forgiveness — could be delayed.
Delays could also have tax implications. A 2021 provision in the American Rescue Plan made student-loan forgiveness tax-free through 2025, so after January 1, 2026, borrowers who receive relief could face thousands of dollars in new tax bills.
The shutdown has also impacted ongoing litigation related to the department’s paperwork processing backlog. The American Federation of Teachers, which includes members enrolled in PSLF, filed a lawsuit urging the department to cancel the loans of borrowers who have met their payment thresholds. The judge overseeing the case wrote in a legal filing earlier this month that the briefings will be paused due to the lapse in appropriations.
On October 17, however, the AFT and the Department of Education filed a joint status report stating that the department will recognize the date a borrower becomes eligible to have their loans discharged as the effective date of the relief, preventing those who reach the payment threshold before the end of the year from being taxed.
