IBR — Income-Based Repayment — was supposed to be a slow but steady path to student loan forgiveness.
And for millions, it still is. But as of July 2025, forgiveness is paused while the Education Department sorts through a legal and technical mess that’s roped IBR into broader repayment overhaul chaos.
Here’s where things stand now, what’s still true, and what’s coming next.
IBR 101 — What It Was Meant to Do
Income-Based Repayment caps your federal loan payments at 10 – 15% of discretionary income. After 20 – 25 years, whatever’s left gets forgiven. That was the promise. But in 2025, the machinery behind that promise jammed — and borrowers are left waiting.
Forgiveness Is Paused Right Now
As of July 2025, IBR forgiveness is temporarily halted. Not because the plan is illegal, but because it runs on the same system as the SAVE plan, which got tangled in court. Until those systems are updated, no IBR discharges are happening — even if you’re eligible today.
You Can Still Make Payments (And Should)
The pause affects forgiveness, not repayment. You can and should still make payments under IBR. If you’re past the 20- or 25-year mark, any extra payments you make now will eventually be refunded once forgiveness resumes. Stay enrolled and keep your records sharp.
What You’re Waiting On
Roughly 2 million borrowers are impacted. The Education Department has given no firm date for restarting forgiveness. They’re working on retroactive audits and system corrections after widespread undercounting of qualifying payments.
Still Legal, Still Standing
IBR isn’t dead. It’s not being eliminated or overturned. It’s baked into federal law via the Higher Education Act. That gives it more protection than SAVE or other newer plans. What’s frozen is the forgiveness function — not the plan itself.
New Rules Are Coming in 2026
Thanks to the new “One Big Beautiful Bill” signed in July 2025, borrowers starting in July 2026 must choose from two new repayment tracks:
A 10 – 25 year standard repayment
A new Repayment Assistance Plan (RAP) with 30-year forgiveness
Existing IBR borrowers are grandfathered in — for now.
Goodbye, Partial Financial Hardship Rule
The old rule requiring borrowers to show a “partial financial hardship” to qualify for IBR is gone. That opens the door to many more borrowers — including those with Parent PLUS loans (if consolidated). It’s one of the rare bright spots in this messy moment.
Tax Bomb Still on the Table (After 2025)
Forgiven debt under IBR is still taxable unless Congress acts. For now, the tax burden is paused through Dec. 31, 2025. But if forgiveness resumes after that window closes, borrowers could face big IRS bills — unless legislation extends the tax break.
IBR vs. PSLF: Still Two Separate Tracks
Public Service Loan Forgiveness (PSLF) remains intact — 10 years of payments for government and nonprofit workers, tax-free. But PSLF is not affected by the current IBR pause. If you’re eligible for both, IBR payments can count toward PSLF if certified.
Delayed, Not Dead
If you’re on IBR, don’t panic. Forgiveness is paused, not canceled. Stay in your plan, keep making payments, and monitor your loan servicer like a hawk. With new policies taking over in 2026, now’s the time to double-check your standing and prepare for change.
