
- The Division of Schooling has paused processing some sorts of scholar mortgage forgiveness.
- PSLF continues to be processing, whereas IBR-related forgiveness is presently paused because of “system updates”
- SAVE, PAYE, and ICR primarily based mortgage forgiveness are blocked by courtroom orders.
As scholar mortgage debtors brace for the complete influence of the OBBBA to take impact, questions are swirling about whether or not forgiveness has been utterly suspended throughout the board. Some headlines recommend that nobody is getting debt aid. The truth is extra difficult.
Whether or not scholar mortgage forgiveness is processing or not relies on the mortgage forgiveness program you are ready on.
The Public Service Mortgage Forgiveness program continues to be processing purposes, at the same time as a PSLF buyback backlog grows. The Earnings-Primarily based Compensation plan, or IBR, is quickly paused for “system updates”, however not because of a courtroom order. Scholar mortgage forgiveness underneath SAVE, PAYE, and ICR is blocked by a federal injunction. And even incapacity discharge is delayed for system updates.
The truth that so many points are arising round scholar mortgage forgiveness processing is main many to query what’s taking place. Are “system updates” actually taking place, or is the brand new administration slow-walking their authorized mandates to offer mortgage forgiveness for eligible debtors? It is regarding quite a lot of debtors.
PSLF Is Functioning, However Some Expertise Delays
Public Service Mortgage Forgiveness, often known as PSLF, continues to course of purposes and discharge balances for eligible debtors. This program requires 120 qualifying month-to-month funds whereas working full-time for a qualifying employer, equivalent to a authorities company or nonprofit.
The Division of Schooling has not stopped PSLF forgiveness. The truth is, the administration has reiterated in numerous courtroom instances and hearings that PSLF relies on a statute handed by Congress, and subsequently not impacted by the authorized challenges which have affected newer income-driven compensation plans. And debtors are reporting inexperienced banners and golden letters practically on a regular basis.
Nonetheless, the PSLF buyback initiative (launched to assist debtors retroactively rely beforehand ineligible funds) is dealing with lengthy delays, with debtors reporting processing timelines of 9 months or longer. There’s presently a backlog of over 72,000 purposes ready to be processed, and solely 3,280 had been processed in July 2025.
SAVE, PAYE, And ICR Forgiveness Are Legally Blocked
Three income-driven compensation plans (SAVE, PAYE, and ICR) are presently unable to course of scholar mortgage forgiveness because of an injunction issued by the eighth Circuit Courtroom of Appeals. The ruling challenged the legality of the SAVE plan and its underlying regulation, which additionally impacts the mortgage forgiveness options of PAYE and ICR.
The Division of Schooling mentioned it’s complying with the ruling by halting forgiveness underneath these three plans. Funds made underneath these plans will nonetheless rely towards mortgage payoff, however debtors reaching the forgiveness threshold won’t have their balances discharged at the moment. As a substitute, they’re going to be positioned in an administrative forbearance pending the end result of the authorized instances.
Debtors on SAVE who wish to proceed progressing towards forgiveness are being informed to change to IBR.
It is necessary to keep in mind that SAVE, PAYE, and ICR are being shut down as a result of One Huge Stunning Invoice, so these plans will not exist sooner or later anyway.
IBR Forgiveness Is Paused For “System Updates”
Whereas SAVE, PAYE, and ICR forgiveness are paused by courtroom injunctions, the IBR plan is just not. That’s as a result of IBR was created straight by Congress and contains an specific statutory pathway to forgiveness after 20 or 25 years, relying on when the borrower took out loans.
Even so, the Division of Schooling has acknowledged it isn’t presently processing IBR discharges. In steering up to date this month, officers mentioned IBR forgiveness is paused because of “system updates” associated to how months in deferment and forbearance are counted. Right here is the up to date FAQ:

No courtroom has ordered a pause on IBR discharges, and no statute blocks the division from persevering with forgiveness underneath the plan. Nonetheless, no IBR mortgage forgiveness processing is presently taking place, and there’s no ETA on when it will resume.
Incapacity Discharge Is Additionally Delayed
Incapacity Discharge is one other program that has been delayed by system points. In December 2024, the Division of Schooling introduced they had been migrating inside methods, and that processing could also be delayed by March 2025. In an announcement in April, it appeared the migration was accomplished, however debtors are nonetheless reporting that their incapacity discharge purposes usually are not being reviewed.
The timeline to course of a Complete and Everlasting Incapacity (TPD) discharge was about 60 to 90 days. Debtors ready needs to be put in an administrative forbearance, with no funds being due.
Scholar Mortgage Debtors Are Left In Limbo
The uncertainty comes as federal coverage is shifting once more. President Trump signed the “Huge Stunning Invoice” earlier this month, enacting sweeping adjustments to income-driven compensation plans. The invoice phases out PAYE, ICR, and SAVE, and introduces a brand new choice: the Compensation Help Plan (RAP). Below RAP, forgiveness received’t be out there till after 30 years of compensation.
Debtors already enrolled in IBR can be allowed to stay underneath the present phrases, together with forgiveness after 20 or 25 years. However new debtors received’t be capable of enroll in IBR as soon as RAP is accessible. New debtors will solely have entry to the Commonplace Plan or RAP.
And beginning subsequent month, curiosity expenses are resuming for hundreds of thousands of debtors enrolled in SAVE who had been beforehand in a court-ordered administrative forbearance. The division reiterated that these debtors usually are not progressing towards forgiveness and will contemplate switching to IBR.
For now, debtors hoping for aid underneath present plans are caught navigating a mixture of paused processing, authorized roadblocks, and coverage transitions.
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