The Trump administration has agreed to restart student debt forgiveness. Borrowers will have the option between two income-driven repayment programs that have been previously paused. The two are income-contingent repayment (ICR) and pay-as-you-earn plans (PAYE). The wheels started spinning with this because of a legal agreement between the US Department of Education and the American Federation of Teachers(AFT). AFT sued the Trump administration at the beginning of 2025 for supposedly illegally blocking or pausing student loan forgiveness.
Under the agreement, the Education Department will restart loan forgiveness for eligible borrowers in the ICR and PAYE programs, which currently serve over 2.5 million people. Borrowers receiving forgiveness in 2025 won’t owe federal taxes on the canceled debt, though that tax break ends this year. Overall, this is good news for students currently facing this issue, but uncertainties arise after 2028 when this will most likely be phased out.
Article: Trump administration agrees to deliver more student loan forgiveness
4 comments:
It’s great to see student loan forgiveness finally restarting under the ICR and PAYE plans—over 2.5 million borrowers could benefit. The agreement with the AFT is a big win for teachers and borrowers who’ve been waiting for relief, though it’s unclear what will happen after 2028 when the tax break and program support may phase out.
This is great news, and one of the Fed Chairman Jerome Powells few political remarks that he has made publicly. I wonder if Jerome Powells stance had any impact on the Trump administration reopening these programs
This is great! I love to see that the Trump Administration has restarted student loan forgiveness. I believe this is really good for students who suffer heavily from this issue.
It’s good they’re finally helping people with student loans again. I just hope the changes actually last this time.
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