Student Loan Forgiveness: What You Need to Know
What is Income-Based Repayment (IBR)?
Under IDR, any remaining loan balance may be forgiven if your federal student loans aren't fully repaid at the end of the repayment period (either 20 or 25 years).
IBR Forgiveness: How it Works
The Department of Education has paused student loan forgiveness under the Income-Based Repayment plan while system updates occur.
Borrowers can have their loans forgiven if they are enrolled in the IBR Plan. Payments on PAYE, SAVE, and ICR are counted toward IBR Plan forgiveness if the borrower is also enrolled in the IBR Plan.
Requirements for IBR Forgiveness
If you're on an IDR plan or working toward PSLF, your remaining loan balance may be forgiven after you make the required number of payments (the amount of time depends on the repayment plan).
Drawbacks of IBR
Borrowers who do receive loan forgiveness after 25 years on IBR may be required to pay income taxes on any forgiven balance. See the IRS website for more information.
Changes to Income-Based Repayment Plans
The OBBB eliminates the requirement that borrowers have a partial financial hardship to qualify for enrollment in an income-based repayment (IBR) plan.
What's Next for IBR?
The Big Bill will end the SAVE Plan and other income-driven repayment plans, leaving only the Income-Based Repayment (IBR) Plan and RAP Plans.