The Education Department has resumed processing student-loan forgiveness for borrowers on Income-Based Repayment. After a months-long pause to verify payment counts, emails went out to eligible borrowers confirming they met the threshold for discharge. Servicers will begin to process those discharges, and accounts should reflect changes once the work is complete.
The notices say most discharges will process within two weeks after the agency sends files to servicers, though some accounts could take longer. The department plans to send final discharge information after October 21, and it has outlined a simple way for borrowers to opt out if needed.
Who This Applies To
This update is specific to borrowers on IBR plans who have reached the forgiveness milestone, typically after 20 or 25 years of qualifying payments. As of Q2 2025, about 2 million borrowers were enrolled in IBR, according to Federal Student Aid data. If you are in IBR and previously received a pause notice, check your inbox for an eligibility email from the department.
What the Email Means
The subject line reads that you are eligible to have your loans discharged. It explains the department will coordinate with your loan servicer over the next several months and send discharge files after October 21. From there, your servicer will complete the processing and alert you once the update is finished.
Deadline to Opt Out
If you want to opt out of IBR relief, you must contact your servicer by October 21 and state that you are not interested in the discharge. The department says some borrowers may opt out to avoid possible state tax liability. If you opt out, you must continue making payments.
Tax Considerations
There is urgency to finish before year-end. The American Rescue Plan made most federal student-loan forgiveness tax-free through December 31, 2025. If your discharge is processed in 2026, some borrowers could face state or federal taxes depending on rules at that time. Talk with a tax professional if you are unsure how this applies to you, and watch for official guidance as the deadline approaches.
How to Prepare
- Watch your inbox for an eligibility email from the Department of Education.
- Log in to your servicer account and confirm your contact details.
- Download payment histories or statements for your records.
- If you plan to opt out, call your servicer before October 21.
- Set alerts to monitor your account for the discharge update.
- Consult a tax pro if you’re unsure about potential state or federal tax impacts.
What If You Did Not Get an Email?
Not all borrowers will receive a notice at the same time. If you believe you have met the IBR threshold but did not get an email, check spam, verify your contact info with your servicer, and review your qualifying payment count in your account. You can also contact your servicer to confirm your status and next steps.
Policy Context
While processing is resuming for eligible IBR borrowers, the administration is still pursuing broader repayment changes. Negotiators have discussed replacing multiple income-driven plans with fewer, less-generous options going forward. The department has also restarted collections on defaulted loans. For borrowers near forgiveness today, timely processing remains the priority.
Key Dates and Expectations
- Now: Check your email for the eligibility notice and verify your servicer account details.
- By October 21: Opt out if you plan to avoid potential tax issues; otherwise, no action is needed.
- After October 21: The department sends discharge files; most borrowers should see updates within about two weeks, though some cases may take longer.
- Before December 31, 2025: Aim to complete processing within the current tax-free window if possible.
IBR discharges are moving again. If you received the email, keep your contact info up to date, watch your account, and be mindful of the October 21 opt-out deadline and year-end tax timing. If you did not receive a notice, check with your servicer to confirm your payment count and status.
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