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IBR Student loan Forgiveness Taxable Income: As of July 21, 2025, the U.S. Department of Education has suspended student loan forgiveness under the Income-Based Repayment (IBR) plan. This decision follows a federal court ruling that questioned the Department’s authority to grant loan forgiveness under the Higher Education Act of 1993. As a result, borrowers enrolled in IBR and other income-driven repayment (IDR) plans are no longer accruing credit toward forgiveness, and online applications for these plans have been temporarily disabled .(
Understanding Income-Based Repayment (IBR)
The IBR plan is an income-driven repayment option that adjusts monthly payments based on a borrower’s income and family size. Under this plan, borrowers can achieve loan forgiveness after 20 or 25 years of qualifying payments, depending on when they first borrowed .
Reasons for the Suspension
The suspension of IBR forgiveness stems from a federal court ruling that found the Department of Education may not have the legal authority to grant such forgiveness under the Higher Education Act of 1993. This decision has led to a pause in processing forgiveness applications and recertifications for income-driven repayment plans, including IBR .
Impact on Borrowers
During this suspension, borrowers will not accrue credit toward forgiveness under the IBR plan. Additionally, online applications and recertification portals for income-driven repayment plans have been temporarily disabled. This situation creates uncertainty for borrowers who were relying on these plans for debt relief .
What Borrowers Can Do
Borrowers affected by this suspension should:
- Stay Informed: Monitor updates from the Department of Education regarding the status of the IBR plan and other income-driven repayment options.
- Explore Alternative Repayment Plans: Consider other repayment options, such as the standard or extended repayment plans, which do not offer forgiveness but may provide more predictable payment schedules.
- Consult with Loan Servicers: Reach out to loan servicers to discuss available options and any potential impacts on repayment strategies.
Conclusion
The suspension of student loan forgiveness under the IBR plan marks a significant change in federal student loan policy. Borrowers should remain proactive in seeking information and exploring alternative repayment options to manage their student loan debt effectively.
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