Education Department Pauses Student Loan Forgiveness for Income-Based Plans

The U.S. Department of Education has temporarily halted student loan cancellations for borrowers in income-driven repayment plans while addressing compliance issues with a federal court order.

The department announced the pause on its Federal Student Aid website earlier this month, citing the need to resolve how certain payment periods are counted toward loan forgiveness eligibility. The court order specifically affects the calculation methods used in income-driven repayment programs.

Approximately two million borrowers participate in these plans, which offer loan forgiveness after 20 or 25 years of qualifying payments, depending on the specific program. The pause affects borrowers who have reached the payment threshold and would otherwise be eligible for debt cancellation.

The Department of Education stated that loan forgiveness will resume after necessary system updates are completed, but has not provided a specific timeline for when the pause will be lifted.