The Pause On Student Loan Forgiveness Under IBR: What Borrowers Need To Know Now

Recently, many student loan borrowers experienced yet another curveball. The Department of Education quietly announced a temporary halt on student loan forgiveness through the Income-Based Repayment (IBR) plan. While this decision didn’t receive much fanfare, it marks a significant shift for anyone relying on IBR as their path to financial relief.

How Does The Big Beautiful Bill Affect Student Loans

What Is the IBR Plan?

The Income-Based Repayment plan, or IBR, is one of several federal income-driven repayment options available to student loan borrowers. It determines your monthly payment based on your income and family size, adjusting this amount annually. For most borrowers, the plan provides two main timelines:

• 25 years for loans taken out before July 1, 2014
• 20 years for loans taken out after that date

After this extended period of consistent, qualifying payments, any remaining balance is supposed to be forgiven.

Why Did Student Loan Forgiveness Under IBR Get Suspended?

The Department’s announcement attributed the pause to necessary “system updates.” Officials explained that they are updating their systems to ensure they properly reflect the months not impacted by recent court injunctions. Once these adjustments are completed, the forgiveness processing is expected to resume. For borrowers who were eagerly awaiting loan discharge, this explanation hasn’t eased the anxiety.

It’s important to note that this change happened against a backdrop of legal battles involving other student loan repayment options, specifically the SAVE, PAYE, and ICR plans. Court rulings against these newer plans led to confusion and complications across the student loan system.

The Unique Situation With IBR

Unlike the SAVE, PAYE, and ICR plans, the IBR plan is not currently wrapped up in any legal disputes. This is because IBR was established directly by Congress, creating a clear legal pathway for forgiveness after a specific repayment period. The other plans, developed by regulatory means, have been held up by court orders and legal wrangling.

Earlier this year, a federal appeals court put an injunction on the SAVE plan (and, by extension, certain regulatory elements that affected PAYE and ICR). This caused alarm among student loan holders, since these rulings blocked the Department from processing forgiveness for those repayment options. The IBR plan was explicitly left unaffected because of its legislative origins.

Even so, as of July 2025, the Department of Education has suspended forgiveness under IBR, citing the need to adapt their systems following the exposure of overlapping policy issues.

The Department’s Reasoning—And the Controversy

Department officials have pointed the finger at recent court decisions relating to SAVE and its affiliated rules. These rulings, according to the department, necessitate review and adjustment to figure out which months should or should not count toward forgiveness in the context of ongoing litigation. But here’s the kicker: there’s no court order saying the Department must halt forgiveness for IBR current borrowers.

This has led to frustration, especially since the law explicitly entitles long-term IBR borrowers to forgiveness after 20 or 25 years of payments. Some advocates argue that the administration may be using the confusion from other plans as cover to slow down or pause IBR relief for administrative or political reasons.

The Ripple Effects on Borrowers

The timing of the IBR suspension couldn’t be worse. Borrowers dealing with federal student loans are already facing a maze of obstacles. Over 1.5 million applications for income-driven repayment are sitting in a backlog, as the Department of Education struggles to resume processing after multiple months of shutdown connected to legal issues with other plans.

Alongside the IBR suspension, the Department recently said it would restart the accrual of interest on loans under the SAVE plan forbearance, beginning in August. This caught many by surprise, and the Department even advised close to eight million borrowers to consider switching to a plan like IBR, which remained legally sound—until the recent suspension threw that advice into limbo.

Borrowers eligible for forgiveness under IBR now have limited practical options:

• Continue making payments while hoping for retroactive forgiveness (and possibly refunds for any overpayments made once the system resumes processing).
• Contact loan servicers to request forbearance while waiting; though note, interest will still accrue during forbearance, potentially increasing your balance.

Navigating Other Changes in Student Loan Policy

The IBR pause is just one facet of a larger overhaul in the student loan landscape. Early in July, sweeping new legislation—informally dubbed the “Big, Beautiful Bill”—was signed into law. It contains several significant changes:

• Modification of the IBR plan for future borrowers.
• Phasing out of the ICR, PAYE, and SAVE plans, replacing them with the new Repayment Assistance Plan (RAP).
• RAP requires 30 years of payments before any forgiveness is allowed, notably longer than current forgiveness timelines under IBR.

For now, IBR remains available to existing borrowers, and the 20- or 25-year forgiveness benchmarks ostensibly stand. However, new enrollees will be steered toward RAP, which has stricter, less generous forgiveness provisions.

Navigating the Uncertainty: What Steps Can Borrowers Take?

At this stage, patience and diligence are key. Although the Department of Education has paused IBR forgiveness, you should still keep all your records, ensure your studentaid.gov and loan servicer accounts are updated, and continue to monitor any official updates closely. Many borrowers are understandably frustrated, yet the best move is to stay engaged. If you’re in a position where forgiveness was imminent, maintain proof of payment and communication with your servicer. This documentation may be invaluable for retroactive forgiveness or refunds once the system resumes.

Additionally, consider consulting with a student loan counselor; they can provide the latest guidance rooted in your personal financial circumstances. For those struggling with monthly payments during this pause, exploring forbearance may be an option, but remember that interest will accrue, so weigh the risks and benefits.

Stay connected with borrower advocacy groups or online communities—they can be both a source of support and a valuable resource for breaking news and practical tips during this transition.

FAQ: The Pause On IBR Student Loan Forgiveness

While the pause raises concerns, knowing your rights and options can help you plan effectively.

What Is Income-Based Repayment (IBR)?

Income-Based Repayment is a federal student loan repayment plan that sets monthly payments according to your income and family size. It typically offers lower monthly payments compared to standard plans and promises loan forgiveness after 20 or 25 years of qualifying payments, depending on when your loans were first taken out.

How Does IBR Differ From Other Income-Driven Plans?

Unlike other income-driven plans, IBR was created by Congress, not just by regulations. While all income-driven plans use your income to determine payments, the IBR’s origins mean it is typically less susceptible to legal changes and offers predictable forgiveness timelines.

Who Is Eligible For Forgiveness Under IBR?

Eligibility for forgiveness under IBR is based on making 20 or 25 years of qualifying monthly payments. You’ll also need to have federal Direct Loans or certain types of federal loans consolidated into the Direct Loan Program, along with meeting all other program requirements.

What Does The Suspension Of IBR Forgiveness Mean For Borrowers?

For borrowers, the suspension means that discharge processing for loans eligible for forgiveness under IBR is currently halted. This pause doesn’t stop you from making qualifying payments, but it does delay the final step of having your remaining balance canceled.

Is The Suspension Of IBR Forgiveness Permanent?

No, the Department of Education has described the pause as temporary. They’re making system changes following recent legal challenges impacting other plans. Forgiveness under IBR is expected to resume once system updates are complete.

Can I Still Make Payments Under IBR?

Yes, you can and should continue making regular scheduled payments under IBR while the pause is in effect. These payments may still count toward your forgiveness timeline and help keep your account in good standing.

Will I Receive Retroactive Forgiveness Once The Pause Lifts?

The Department has stated that once processing resumes, eligible borrowers will receive retroactive forgiveness for any months during the pause where they qualified. It’s wise to keep all payment records in case you need to appeal or seek a refund.

Will Interest Accrue During The Suspension?

Yes, interest will continue to accrue on your remaining balance during the suspension. If you’re nearing forgiveness, be aware that each month of delay may add a little more interest to your total before cancellation.

Should I Consider Forbearance During The Suspension?

Forbearance is an option if you can’t afford payments, but it’s not ideal since interest will keep building up. Consider this only if making payments is not feasible, and consult with your servicer about the impact on your repayment timeline.

Does The Pause Affect Other Forgiveness Programs?

No, this pause only affects IBR-based forgiveness. However, other plans like SAVE, PAYE, and ICR are dealing with separate legal and administrative complications. Always check on the status of your specific plan.

How Can I Track The Status Of My Forgiveness Application?

Log in to studentaid.gov and your loan servicer’s website for the latest updates on your loan status. Watch for communications from the Department and your servicer about your application’s progress.

What Happens If My Loan Should Have Been Forgiven Already?

If you believe you reached your forgiveness milestone, save all your documentation and notify your loan servicer. The Department has promised to process these cases once the suspension ends, but keeping clear records is essential for follow-up.

Will New Borrowers Be Able To Enroll In IBR?

A recent legislative change keeps IBR open for existing borrowers but will phase in a new plan for future borrowers. If you already have loans, you should still be able to use IBR, but new applicants may be directed to newer options.

How Does The New Repayment Assistance Plan (RAP) Compare To IBR?

The newly introduced RAP plan generally has stricter requirements and extends the forgiveness timeline to 30 years. It’s intended for new borrowers, while IBR remains available to those who previously had loans or are already enrolled.

What Legal Challenges Led To This Situation?

Court challenges impacted regulatory-based plans like SAVE, PAYE, and ICR, but IBR remains unaffected by those specific legal actions. However, the confusion and complexity created by these challenges led the Department to pause IBR forgiveness temporarily for system updates.

Will Past Months Count Toward Forgiveness After The Pause?

The Department has said all eligible past months will still count toward the forgiveness calculation once the pause ends. It’s important to make payments as usual and keep track of your qualifying months.

How Does IBR Calculate Monthly Payments?

IBR bases your payment on a percentage of your discretionary income—generally 10-15%. Each year, you’ll recertify your income and family size, which may adjust your monthly payment for the next cycle.

Can I Switch Out Of IBR During The Suspension?

Yes, you can technically switch to another eligible plan if it is open, but given the pause and uncertainty regarding other plans, it may be safest to stay in IBR unless your servicer or a loan counselor advises otherwise.

How Will I Know When IBR Forgiveness Resumes?

Watch for official announcements via email and on studentaid.gov. Your loan servicer should also notify you directly when system updates are complete and forgiveness applications resume.

What Should I Do If My Loan Servicer Gives Conflicting Information?

If you receive conflicting guidance, document all communications and escalate your concern to a supervisor. You can also reach out to the Federal Student Aid Information Center for clarity and additional help.

If I’m In The Forgiveness Window, Do I Still Need To Recertify Income?

Yes, you should continue your annual recertification to remain in good standing in the IBR program, even if you’re eligible for forgiveness soon or during the pause.

What If I Consolidated Loans Midway Through IBR?

Consolidating loans may reset your forgiveness clock if you haven’t already reached the forgiveness threshold. Be sure to understand how consolidation impacts your timeline before making changes.

Can I Appeal If My Forgiveness Is Delayed After The Pause?

Yes, once forgiveness resumes, you have the right to appeal any delay or error. Detailed records of your payments and application documents will speed up the process and support your case.

Does Filing Taxes Jointly Or Separately Affect IBR Payments?

If you’re married, filing separately may reduce your reported income for IBR purposes and lower your payment. However, evaluate the overall tax impact with a professional before making this decision.

How Are Parent PLUS Loans Handled In IBR?

Parent PLUS Loans are not directly eligible for IBR, but you can consolidate them into a Direct Consolidation Loan, which would then be eligible for Income-Contingent Repayment, a related plan.

Can I Make Additional Payments To Reduce Interest?

Yes, making extra payments beyond the required amount can pay down the principal balance and reduce total interest—but it will not affect the months required for forgiveness under IBR.

Are Private Student Loans Eligible For IBR?

No, only federal student loans—specifically Direct Loans—are eligible for IBR. Private student loans have separate terms and are not included in federal income-driven repayment options.

Will My Forgiven Balance Be Taxed?

Currently, forgiven balances under federal forgiveness programs are not considered taxable income through 2025. It’s possible this tax treatment will continue, but watch for policy updates.

What Are The Signs Of Student Loan Scams During The Pause?

Be wary of any company promising quick forgiveness for a fee, requests for your Social Security number, or pressuring you to act urgently. Always deal directly with official government websites and your loan servicer.

What’s The Best Way To Stay Informed During The Pause?

Sign up for updates on studentaid.gov, follow reputable advocacy organizations, and regularly check your email for communications from your loan servicer. Stay connected to borrower communities for the latest news.

If I’m Close To Forgiveness, Should I Stop Making Payments?

No, continue making scheduled payments. Skipping payments can risk delinquency or default, harming your credit. If you’re truly struggling, consult your servicer about hardship options instead.

How Will This Pause Impact My Credit Score?

The pause itself won’t impact your credit score as long as you remain in good standing and make required payments. Delinquency or missed payments during this time, however, can negatively affect your credit.

Conclusion: Stay Engaged And Be Prepared

This temporary pause has added a new layer of complexity for many borrowers who were counting on IBR forgiveness. While it’s frustrating to wait, being proactive and keeping meticulous records is your best defense. Make sure your details are updated, keep documentation of your payments, and don’t hesitate to seek guidance if you’re unsure about your options. The Department of Education is expected to process forgiveness retroactively once the suspension is lifted. In the meantime, try to keep calm and stay informed—relief should resume soon, and being prepared will help you take full advantage when it does.