The Department of Education has suspended student loan forgiveness under the Income-Based Repayment (IBR) plan due to a court injunction on another income-driven repayment plan, SAVE. This decision affects over 1.5 million borrowers with stuck applications and those who had reached the threshold for forgiveness but didn’t receive it.
IBR uses a formula tied to income and family size to determine monthly payments, and borrowers who haven’t paid off their loans by the end of their 20-year or 25-year repayment term are eligible for forgiveness. Unlike SAVE, IBR is not subject to legal challenges, as it was created separately by Congress and explicitly authorizes student loan forgiveness.
However, despite this, the department is not processing IBR forgiveness due to court-related issues. The suspension affects borrowers who had reached the threshold for forgiveness but didn’t receive it, leaving them with limited options, including continuing payments under IBR or requesting a forbearance to suspend payments while waiting for a discharge.
The Department of Education has stated that forgiveness will resume once systems are updated, and interest will continue to accrue on loans during the forbearance period. Borrower groups have criticized the administration’s handling of student loan debt, calling it “mismanagement” amid recent court orders involving SAVE.
As the federal student loan repayment system experiences significant upheaval, borrowers are encouraged to transition to a legally compliant repayment plan, such as IBR. Changes are also coming soon with the repeal of ICR, PAYE, and SAVE plans and the introduction of a new Repayment Assistance Plan (RAP).
Source: https://www.forbes.com/sites/adamminsky/2025/07/21/department-of-education-suspends-student-loan-forgiveness-under-ibr