US President Donald Trump signs executive orders relating to higher education institutions, alongside US Secretary of Education Linda McMahon (R), in the Oval Office of the White House in Washington, DC, on April 23, 2025.
Saul Loeb | Afp | Getty Images
The Trump administration has resumed forgiving student debt for some borrowers enrolled in a program that’s been partially paused since July, a trade group told CNBC.
Borrowers who have been in repayment for decades and are eligible for debt cancellation under the Income-Based Repayment plan, or IBR, are getting notices that they will soon receive the relief.
Scott Buchanan, executive director of the Student Loan Servicing Alliance — a trade group for the federal student loan servicers — confirmed to CNBC that IBR discharges have resumed.
Consumer advocates also tell CNBC they have heard from borrowers on IBR who recently received notices of forgiveness. Persis Yu, deputy executive director and managing counsel at Protect Borrowers, and Betsy Mayotte, president of The Institute of Student Loan Advisors, both said they know of borrowers who’ve been approved for the relief.
The U.S. Department of Education did not respond to a request for comment on the loan forgiveness actions. A CNBC reporter’s email to a spokesperson at the agency was met with an automated message, saying, “I will respond to emails once government functions resume.”
Loan forgiveness paused since July
Over the summer, the U.S. Department of Education announced that it would temporarily stop forgiving the debt of borrowers enrolled in IBR. Under its terms, IBR concludes in debt erasure after 20 years or 25 years of payments, depending on the age of a borrower’s loans.
IBR will be one of only a few repayment options left to many federal student loan holders after recent court actions and Congress’ passage of President Donald Trump’s “big, beautiful bill,” which phases out several existing student loan repayment plans.
The pause put many student loan borrowers who’ve been in repayment for decades and were eligible for forgiveness in an especially frustrating bind, higher education expert Mark Kantrowitz said. That’s because IBR is the only income-driven repayment plan still available that leads to loan erasure, Kantrowitz said.
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The Education Department told CNBC in July that it had paused loan forgiveness under IBR while it responded to recent court actions involving the Biden administration-era SAVE, or Saving on a Valuable Education, plan.
The department said that the 8th U.S. Circuit Court of Appeals’ decision in February, which blocked the SAVE plan, had other impacts on student loan repayment.
Under the SAVE plan, certain periods during which borrowers postponed their payments would count toward their forgiveness timeline. With SAVE blocked, borrowers no longer get credit during those forbearances.
The Education Department said it had paused the relief while it assessed the correct payment counts for borrowers, and that anyone who made payments after becoming eligible for forgiveness would get a refund when the discharges continued.
IBR relief central in recent lawsuit
The paused IBR loan forgiveness became a central issue in the American Federation of Teacher’s legal battle with the Education Department, Yu said.
The teacher’s union, which represents nearly 2 million members, filed a lawsuit against the Trump administration in March, accusing it of depriving student loan borrowers of their rights. Protect Borrowers is serving as AFT’s legal counsel.
Still, Yu said the department’s recent actions do not resolve the AFT litigation. She said many other borrowers are still waiting for debt cancellation, including tens of thousands of people who believe they’re eligible for Public Service Loan Forgiveness. PSLF offers debt cancellation to those who’ve spent a decade working for certain not-for-profits or the government.
As of Aug. 31, there’s a 74,510-person backlog of borrowers waiting for their PSLF determination, according to a court filing from the Education Department. Some of the borrowers CNBC has spoken with said they submitted their requests for loan forgiveness over half a year ago or more.
Are you one of the recent borrowers to get notice of student loan forgiveness under IBR? If you’re willing to share your experience for a story, please email at [email protected]
