By Cora Lewis
NEW YORK (AP) – In a federal overhaul of student loan plans, many borrowers are wondering what it means for their loan forgiveness hopes. In particular, those registered in a repayment plan known as income-based repayment, or IBR, are wondering whether forgiveness is still available.
A recent update from the education department has suspended forgiveness under IBR planning while the system is being updated. “IBR forgiveness will resume once these updates are complete,” the agency said.
The IBR is not affected by a federal court injunction that has prevented former President Joe Biden from saving valuable education or planning to save relief. The IBR plan was created by Congress separately from other existing repayment plans, including what is known as Paye and ICR. He is also exempt from several changes from President Donald Trump’s tax and spending bills.
Here’s what you need to know.
Which income-driven repayment plans are affected by the court’s injunction?
Following the court’s injunction last summer, the plan is currently suspended as saves, continuous repayment of income, or ICR loan exemptions, and payments when earned, or pays for payments, or those plans were not created by Congress. A legal action that raises doubt whether student loan exemptions were approved under federal laws governing these plans. The IBR plan was created under a different authority.
The IBR created by the Congress reduces monthly payments for borrowers with low incomes. It also calls laws that allow forgiveness of Balance student loans at the end of the 20 or 25-year repayment period.
When will IBR forgiveness resume?
The education department does not provide a timeline for when the system updates are complete and forgiveness resumes.
Should borrowers continue to pay IBR provisionally?
Borrowers registered with IBRs that have reached the forgiveness threshold may not see loans exempt as a result of the suspension, which may continue to pay in the hope that the education sector will refund the excess payment. The plan will provide monthly payment allowance of 240 or 300 or post-month payments, depending on when the borrower has registered.
Borrowers can also request tolerance from the loan servicer. In that case, interest will continue to arise in the remaining balance.
What changes have come from Trump’s “big beautiful bill”?
Trump’s Tax and Expense Act will eventually phase out ICRs, saving payments, saving plans, and replacing them with repayment assistance plans. The IBR plan will continue to exist and will provide forgiveness in 20 or 25 years. In contrast, RAPs require 30 years of repayment before forgiveness is granted.
The Associated Press is supported by the Charles Schwab Foundation for education and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.
Original issue: July 22, 2025, 5:37pm EDT
