IBR student loan forgiveness temporarily halted due to system revamp, yet not yet rescinded
Resumption of Student Loan Forgiveness for IBR Borrowers, but Temporary Pause for SAVE Plan
After a temporary pause due to system upgrades, the processing of student loan forgiveness for borrowers enrolled in the Income-Based Repayment (IBR) plan has resumed. However, a court ruling has affected the SAVE plan, leading to a pause in its processing [1][3].
IBR, a student loan repayment plan codified in federal law, is not impacted by recent legal challenges [4]. Borrowers who have met the required number of payments will still be eligible for forgiveness once the Department resumes operations [2].
Loan servicers like MOHELA have resumed processing IBR, PAYE, and ICR applications, and accounts remain in administrative forbearance until the applications are processed [3].
For borrowers on the SAVE Plan, an administrative forbearance (with no interest accrual until August 1, 2025) has been applied due to court injunctions invalidating the SAVE plan. This forbearance does not count toward Public Service Loan Forgiveness (PSLF) or IDR forgiveness requirements [1][3]. After August 1, 2025, interest will begin accruing again on SAVE plan loans to comply with court orders [3][4].
Borrowers who had an IDR application submitted before April 27, 2025, and it was not processed, can now reapply to use IRS-verified income to expedite processing [3].
The resumption of IBR forgiveness processing is a positive step for many borrowers. However, those on or affected by the SAVE plan remain under transitional rules with accrual of interest resuming soon and uncertain forgiveness eligibility until further updates [1][3][4].
Borrowers are encouraged to check their loan servicer accounts and consider switching repayment plans if needed for continued progress toward forgiveness. Advocates are urging the Department to accelerate system improvements and enhance transparency regarding timelines and borrower expectations [1].
It is important to note that borrowers approaching the 25-year forgiveness mark should not switch to alternative plans during the pause, as doing so may reset their progress. The pause adds to borrower uncertainty amid a volatile policy environment for student debt relief [5].
Borrowers are advised to monitor updates from the Department of Education and loan servicers for announcements regarding the resumption of forgiveness processing and any changes in plan eligibility or requirements [1]. Key income-driven plans and some loan types will be eliminated in July 2026 through federal legislation, but PSLF remains available for most borrowers [2].
References:
- EdDepartment.gov - Department of Education Updates on IDR Plans
- Congress.gov - Federal Legislation Affecting Student Loan Forgiveness Programmes
- Mohela.com - MOHELA Announcements on IDR Plans
- Courthousenews.com - Court Rulings Affecting the SAVE Plan and IDR Forgiveness
- Npr.org - Borrower Uncertainty Amid Volatile Policy Environment for Student Debt Relief
- The resumption of IBR loan forgiveness processing could potentially stimulate investment in Africa, as students with reduced debt burdens might have increased funds to invest in education-and-self-development projects on the continent.
- To effectively manage the logistics of handling the influx of student loan forgiveness applications, the Department of Education might need to improve its infrastructure to ensure a smooth processing and quick decision-making process, thereby benefiting both borrowers and the finance sector.
- With the current pause on SAVE plan forgiveness and the impending accrual of interest after August 1, 2025, borrowers in Africa (especially those who have already made the required payments on their loans) could face significant challenges with regards to education-and-self-development, as their loan repayments would become more burdensome.
