As I understand the Dept of Ed. update today, 1-15-26, there will be no IBR/ICR/PAYE forgiveness for anyone who reached 300 payments April 2025 or later until the court signs off on the SAVE plan settlement. The courts have been doing nothing with SAVE for over a year, so am concerned this is just another excuse to drag this out indefinitely. I thought the purpose of the AFT settlement was to restart forgiveness, avoid the tax bomb for those who reached 300 before 12-31-25, stop people from having to keep paying beyond what they owe, and get this off their credit report. Now it seems like they are backtraking from the lawsuit settlement. I have seen several posts on Reddit that stated people received the golden email on 9-30-25 and 11-25-25 that had reached their 300 threshold AFTER April 2025, so am confused. The Dept of Ed is saying they are giving forgiveness only to those before April 2025, but is there anyone who received forgiveness who reached the 300 threshold April 2025 or later?
Dept of Ed/AFT Update and Forgiveness Pause on those who reached 300 after April 2025
byu/rattletherattler inStudentLoans
Posted by rattletherattler
2 Comments
According to a the latest status report the department is only processing forgiveness for IBR borrowers who reached 300 payments before April 2025 because the injunction from the SAVE case, a separate lawsuit, caused some forbearances and deferments created by the blocked rule to not count towards forgiveness since then. The proposed settlement for the SAVE case would make those forbearances and deferments count anyway, but the department’s hands are legally tied by the injunction that is still in place until that agreement is actually approved by the courts.
So far their reasoning is that they are focusing on borrowers who reached forgiveness before April 2025 because that guarantees that a borrower’s forgiveness does not depend on any potentially ineligible forbearances or deferments. They say that they could update their systems to reflect the potential ineligibility of the certain forbearances and deferments but that they don’t see the point if the proposed SAVE case settlement would make that a wasted effort that they would have to turn right back around and fix.
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EDIT: read the further comments below. It doesn’t look like the department is actually following the guidelines they say they are. Borrowers on this sub who reached 300 payments after April 2025 have received forgiveness on IBR and shared it on this sub.
I wonder if it has something to do with being in IBR by April 2025? I moved from SAVE to IBR in January 2025 and made payments all year. I reached 300 in November and received the golden email. Loans are currently discharged and I’ve received a statement that I will NOT owe federal taxes on the discharged amount.