Is Student Loan Forgiveness on Hold?

Understanding the Current State of Student Loan Forgiveness

The Department of Education has paused processing some types of student loan forgiveness, leading to confusion among borrowers about whether relief is available. While some programs are still operational, others face delays or legal restrictions. The situation varies depending on which specific loan forgiveness program a borrower is enrolled in.

Public Service Loan Forgiveness (PSLF) Is Still Processing

Public Service Loan Forgiveness (PSLF) remains active, with applications being processed for eligible borrowers. This program requires 120 qualifying monthly payments while working full-time for a government agency or nonprofit organization. Despite this, there are reports of delays due to a backlog of over 65,000 applications waiting to be reviewed. Only 2,224 applications were processed in June 2025, indicating that the system is struggling to keep up with demand.

Borrowers who have completed the required payments often see their balances discharged, but those participating in the PSLF buyback initiative—designed to count previously ineligible payments—face extended processing times of nine months or more. This delay has caused frustration among many borrowers.

SAVE, PAYE, and ICR Forgiveness Are Legally Blocked

Three income-driven repayment plans—SAVE, PAYE, and ICR—are currently unable to process student loan forgiveness due to a federal injunction issued by the 8th Circuit Court of Appeals. The ruling challenged the legality of the SAVE plan and its underlying regulations, which also affects the forgiveness features of PAYE and ICR.

As a result, the Department of Education is complying with the court order by halting forgiveness under these three plans. Payments made under these plans still count toward loan payoff, but borrowers reaching the forgiveness threshold will not have their balances discharged at this time. Instead, they will be placed in administrative forbearance pending the outcome of the legal cases.

Borrowers on SAVE are being advised to switch to IBR if they want to continue progressing toward forgiveness. It's important to note that these plans are being phased out due to the "Big Beautiful Bill," which means they will no longer exist in the future.

IBR Forgiveness Is Paused for "System Updates"

Unlike SAVE, PAYE, and ICR, the Income-Based Repayment (IBR) plan is not blocked by a court order. However, the Department of Education has acknowledged it is not currently processing IBR discharges. According to updated guidance, this pause is due to “system updates” related to how months in deferment and forbearance are counted.

No court has ordered a pause on IBR discharges, and no statute blocks the department from continuing forgiveness under the plan. However, there is currently no timeline for when processing will resume, leaving many borrowers in limbo.

Disability Discharge Is Also Delayed

Disability Discharge, another key program, is also experiencing delays. In December 2024, the Department of Education announced a migration of internal systems, which led to processing delays through March 2025. Although an April announcement suggested the migration was complete, borrowers are still reporting that their disability discharge applications are not being reviewed.

Previously, the processing time for Total and Permanent Disability (TPD) discharge was about 60 to 90 days. Borrowers waiting for a decision should be placed in administrative forbearance, with no payments due during the review period. However, current delays are causing uncertainty for many borrowers.

Policy Changes Are Creating More Uncertainty

Federal policy is shifting again, with President Trump signing the “Big Beautiful Bill” earlier this month. This legislation enacts sweeping changes to income-driven repayment plans, phasing out PAYE, ICR, and SAVE. A new option, the Repayment Assistance Plan (RAP), will be introduced. Under RAP, forgiveness won’t be available until after 30 years of repayment.

Borrowers already enrolled in IBR will be allowed to remain under the existing terms, including forgiveness after 20 or 25 years. However, new borrowers will only have access to the Standard Plan or RAP once it becomes available.

Additionally, interest charges are resuming for millions of borrowers enrolled in SAVE who were previously in a court-ordered administrative forbearance. The department has reiterated that these borrowers are not progressing toward forgiveness and should consider switching to IBR.

Navigating the Current Landscape

For now, borrowers hoping for relief under existing plans are stuck navigating a mix of paused processing, legal roadblocks, and policy transitions. With so many factors at play, it’s clear that the student loan forgiveness landscape is far from straightforward. As the Department of Education continues to address system updates and legal challenges, borrowers must stay informed and prepared for ongoing uncertainty.