Some student loan borrowers see debt forgiveness as others await decision
The U.S. Department of Education announced that thousands of federal student loan borrowers are expected to receive discharges in the month of May.
The move comes as part of a court-ordered interim agreement to address processing delays and debt forgiveness suspensions that occurred in 2025 by approving forgiveness for more than 5,000 borrowers on income-driven repayment plans who have reached the end of their terms, according to a news article from Forbes. Every two months, the Education Department is set to determine which borrowers are eligible for discharges, a process that can take one to two months from identification to the receipt of debt forgiveness. However, the department also suggested that hundreds of borrowers may experience delays in receiving their debt forgiveness as a result of issues they encountered during the data validation process in March.
While about 3,600 and 1,400 borrowers on the respective Income-Based Repayment and Income-Contingent Repayment plans will see discharges, about 300 borrowers on the Pay As You Earn plan may not meet the eligibility criteria for discharges on their student loans because of a system glitch that erroneously allowed those with loans granted prior to 2007 to enroll in the plan. Because of the 20-year timeline to debt forgiveness on the PAYE plan, borrowers would first qualify for discharge in 2027 rather than in 2026. Nonetheless, about 800 borrowers on the PAYE plan received discharges in March. The Education Department is still weighing whether the 1,100 PAYE enrollees initially labeled as eligible will still receive debt relief.
The department’s final regulations intend to limit the number of PAYE enrollees going forward until the plan is terminated in July 2028, a decision that could impact borrowers seeking future discharges on the plan.
Read more: Forbes
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