For millions of borrowers, long-awaited relief is finally back. Following a lawsuit by the American Federation of Teachers, the Trump administration has agreed to resume and expand student loan forgiveness under the Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Income-Contingent Repayment (ICR) programs — including coverage for Parent PLUS loans.
This is a huge step forward for borrowers who’ve been paying for 20 years or more and waiting for their forgiveness reviews to resume. But there’s a major catch: after December 31, 2025, any forgiven amount could be taxed as income — a looming “tax bomb” for anyone who waits too long to act.
Congress has set a deadline that makes forgiveness tax-free only through the end of 2025. Starting July 2026, the Department of Education will roll out a Repayment Assistance program — a 30-year plan that replaces current IDR options. Borrowers who miss the window could find themselves stuck paying an additional five to ten years of interest.
If you’ve had federal student loans for more than a decade — even with periods of deferment or forbearance — now is the time to enroll in an income-driven plan and make sure your qualifying payments are counted toward forgiveness.
Under the new agreement, forgiveness will continue for borrowers in IBR, PAYE, and ICR — plus those in Public Service Loan Forgiveness (PSLF). The Department of Education has also committed to improving transparency, promising to relaunch the federal payment tracker to show how many qualifying payments borrowers have made.
If you’ve been told by your servicer that you’re ineligible or that your income is “too high” for IBR — that’s incorrect. There are no income limits under the new rules. Servicers are still catching up to policy changes, but LoanSense tracks these updates daily to guide borrowers accurately.
LoanSense simplifies the process by analyzing your StudentAid.gov data file and showing how many payments count toward forgiveness. Our experts ensure you’re on the fastest path to discharge — avoiding unnecessary forbearance, pauses, or misinformation from servicers.
Borrowers who’ve been paying for 10+ years should act now, before the rules change and before the tax-free window closes.
👉 Book your personalized consultation today to see if you qualify for forgiveness before the 2026 tax bomb: app.myloansense.com