Student loan forgiveness in the IBR plan is paused, Education Department says. Here’s what to know.

Millions of borrowers with student loans who participate in the Department of Education’s income-based repayment plan, known as IBR, are facing uncertainty as the government has temporarily halted forgiveness for these individuals. The IBR plan not only reduces monthly loan payments based on income but also promises loan forgiveness after 20 years of repayment. However, the Department of Education has paused forgiveness for IBR borrowers due to ongoing court injunctions related to the Biden administration’s student loan forgiveness initiatives.

At the end of 2024, around 40% of the 33 million individuals repaying student loans were enrolled in the Education Department’s income-based repayment plans, including the IBR program. Unfortunately, three of these programs were already on hold following a court ruling, and now forgiveness for the approximately 2 million participants in the IBR plan has also been suspended.

The legal challenges stem from lawsuits filed in 2024 regarding the Biden administration’s flagship student loan repayment plan, called the Saving on a Valuable Education (SAVE) plan. This program aimed to address longstanding issues with previous income-based repayment plans and garnered nearly 8 million enrollees by the end of 2024. Since the SAVE plan could contribute to loan discharges in the IBR program, forgiveness for IBR participants has been temporarily halted.

In addition to the IBR plan, forgiveness under the SAVE, Income-Contingent Repayment (ICR), and Pay As You Earn (PAYE) plans is currently paused due to court rulings questioning the authorization of student loan forgiveness under these programs. While there is uncertainty surrounding when loan discharges will resume, the Education Department is working to recalculate payment counts to ensure accurate repayment tracking.

Borrowers in the IBR program are advised to continue making payments as they are eligible for loan forgiveness after 20 years of repayment. The Education Department has assured borrowers that any overpayments made during the forgiveness pause will be refunded once discharges resume. Borrowers can also request forbearance from their loan servicer, although interest will continue to accrue on any outstanding balance.

Overall, the Education Department is working to resolve the legal challenges surrounding student loan forgiveness and plans to resume forgiveness for IBR participants once the correct payment counts are established. In the meantime, borrowers are encouraged to stay informed and continue making payments towards their loans.