Months after suspension, the U.S. Department of Education has reinstated a large student loan cancellation program, covering almost 2 million borrowers.
During the last week, most borrowers on income-based repayment (IBR) plans have been receiving confirmation emails stating that they’ve reached the payment level necessary for the cancellation of their debt.
The email, reviewed by Business Insider, came with the subject line “You’re eligible to have your student loan(s) discharged.” It informed borrowers that the department is now collaborating with loan servicers to process their relief, with full discharges expected to be finalized after October 21.
Under IBR plans, borrowers pay monthly amounts determined based on their income, with the assurance of loan forgiveness after making qualifying payments between 20 and 25 years. Based on Federal Student Aid (FSA) figures, as of the second quarter of 2025, approximately 2 million borrowers were enrolled in these plans.
The Education Department had suspended IBR-related relief in July 2025, stating that it required more time to confirm payment quantities and confirm that borrowers got the proper forgiveness determinations. With the review now complete, the process has begun again in full force.
In the latest announcement, the department guaranteed borrowers that the accounts would shortly be updated by servicers to show the discharges. “We expect most borrowers will have the discharge processed in two weeks, but for others it may take longer,” the department said.
Borrowers who don’t want to get the relief, mainly those who are worried about possible state tax bills, will have to opt out no later than Oct. 21 by informing their loan servicers. Borrowers who opt out, though, will have to keep paying on their remaining balance.
Previously in September, the American Federation of Teachers (AFT) submitted a complaint requesting the Department of Education to act hastily in canceling loans for the borrowers who had already reached their payment thresholds. According to the union, undue delays could subject borrowers to taxable debt forgiveness, contingent on changing state and federal tax policies.
Although forgiveness processing has been reinstated, the Trump administration at the same time is going forward with sweeping reforms designed to restrict future student debt relief. The Education Department just finished its first week of negotiations since the President’s new “big beautiful” spending bill, which aims to substitute current income-driven repayment (IDR) plans with only two less generous alternatives.
In addition, the government has confirmed plans to increase the size of the federal ombudsman’s office, with more emphasis on informing borrowers on repayment options compared to forgiveness routes. This change comes after the restart of collections on defaulted student loans in May, bringing an end to a five-year hiatus that started in the COVID-19 pandemic.
In contrast to the prior Administration’s emphasis on loan forgiveness, the Trump Administration is acting to put in place meaningful and much-needed reforms to the servicing of student loans,” said James Bergeron, acting Federal Student Aid head, in a September press statement. He added that the intention is to “better serve borrowers and American taxpayers.
The new issuance of IBR discharges brings speedy relief to millions of Americans who have spent years paying back their student loans. But it also illustrates the continuing dance between forgiveness supporters and policymakers who want to recast the student loan system for future borrowers.
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