Student loans forgiveness has officially resumed under the Trump administration as of October 2025, and right now, around 2 million borrowers who are enrolled in the Income-Based Repayment plan are set to benefit from this restart. The program, which had been on pause since July, is now processing debt cancellation for borrowers who’ve spent 20 to 25 years making payments on their federal student loans.
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Student Loans Forgiveness Program Update Under Trump’s 2025 Plan
The student loan forgiveness program was halted back in July when the Education Department stopped forgiving debt for IBR borrowers. At the time, officials said they needed to ensure payment counts were accurate while also responding to court orders related to the blocked SAVE plan from the Biden era.
Scott Buchanan, who serves as executive director of the Student Loan Servicing Alliance, confirmed to CNBC that IBR discharges have now resumed. Borrowers who qualified started receiving emails over the past week with subject lines reading: “You’re eligible to have your student loan(s) discharged.”
Consumer advocates like Persis Yu from Protect Borrowers and Betsy Mayotte from The Institute of Student Loan Advisors both confirmed they’ve been hearing from borrowers recently approved for relief under the student loans forgiveness program.
Eligibility and Timeline for 2025
Under the Income-Based Repayment plan, borrowers receive student loan forgiveness after they make payments for either 20 or 25 years, depending on when they originally took out the loans. The emails going out right now inform borrowers that their servicers will process the relief “over the next several months,” and most borrowers should see their discharge completed within two weeks, though some cases could take a bit longer.
As of the second quarter of 2025, about 2 million borrowers had enrolled in IBR, according to Federal Student Aid data. Borrowers who want to opt out of the student loans forgiveness must contact their servicer by October 21.
Changes Under the Current Administration
This student loan forgiveness update comes at a time when the Trump administration is reshaping federal loan repayment altogether. Congress passed President Trump’s “big beautiful bill,” which is phasing out several existing repayment plans. IBR is becoming one of the only options left that still leads to loan cancellation, according to higher education expert Mark Kantrowitz.
James Bergeron, acting head of Federal Student Aid, stated:
“Unlike the previous Administration’s focus on loan forgiveness, the Trump Administration is taking action to implement meaningful and necessary enhancements to the way student loans are serviced to better serve borrowers and American taxpayers.”
The department wrapped up its first week of negotiations on October 3, working on changes that would eliminate current income-driven repayment plans and replace them with two new, less-generous options.
Important December Deadline
There’s an urgent reason why borrowers want their student loans forgiveness processed before the year ends. The 2021 American Rescue Plan included a provision that made forgiveness tax-free, and this provision expires on December 31, 2025. After January 1, 2026, borrowers who receive debt cancellation will face thousands of dollars in tax bills on the forgiven amounts.
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Other Borrowers Still Waiting
The resumed IBR processing doesn’t solve all the problems, though. The American Federation of Teachers, which represents nearly 2 million members, filed a lawsuit against the Trump administration back in March. The union accused the department of depriving student loan borrowers of their rights, with Protect Borrowers serving as legal counsel.
Yu pointed out that tens of thousands of people are still waiting for Public Service Loan Forgiveness, which cancels debt for borrowers who’ve worked a decade for certain nonprofits or government agencies. As of August 31, there was a backlog of 74,510 borrowers waiting for their PSLF determination, according to an Education Department court filing. Some borrowers CNBC spoke with said they submitted their forgiveness requests more than six months ago.
The department also restarted collections on defaulted loans in May after a five-year pause, and officials are expanding the ombudsman’s office to focus more on informing borrowers about repayment options rather than debt relief.