The U.S. Department of Education has paused student loan forgiveness with no clear timeline of when it will resume.
The Income-Based Repayment plan, a student loan forgiveness that allows individuals to make payments based on their income and to receive forgiveness after 20 to 25 years of continuous payments, was unexpectedly paused by the Education Department, while payment records are being updated to reflect recent court injunctions that halted loan forgiveness.
“IBR forgiveness will resume once those updates are completed,” the department said.
The Biden administration launched a loan forgiveness program, the Saving on a Valuable Education plan, but it was found to be illegal.
IBR is currently the only loan forgiveness plan not facing legal challenges.
The Department of Education confirmed in its updated guidance on the pending litigation earlier in July that student loan forgiveness like SAVE and other loan forgiveness plans, have been blocked. But IBR is not.
“Forgiveness as a feature of the SAVE, PAYE, and ICR Plans is currently paused, because those plans were not created by Congress,” said the Education Department. “Generally, ED can and will still process loan forgiveness for the IBR Plan, which was separately enacted by Congress.”
The department stated any IBR forbearances were impacted by ongoing court action.
“The Department has temporarily paused discharges for IBR borrowers in order to comply with ongoing court injunctions regarding the Biden Administration’s illegal attempts at student loan forgiveness. The Department’s SAVE rule provided the authority to count forbearances in IBR toward loan forgiveness, but that rule has been enjoined,” Deputy Press Secretary Ellen Keast said.
