Most of President Biden’s student loan forgiveness efforts have ended. The Supreme Court struck down the broad plan to cancel up to $20,000 per borrower in June 2023, courts blocked the SAVE repayment plan, and the One Big Beautiful Bill Act signed on July 4, 2025 repealed SAVE, PAYE, and ICR outright and rolled back Biden-era borrower defense and closed school rules.1Federal Student Aid. (GEN-25-04) Federal Student Loan Program Provisions Effective Under One Big Beautiful Bill Act What remains are the forgiveness programs that predated the Biden administration and one new income-driven plan launching in 2026: Public Service Loan Forgiveness, income-driven repayment forgiveness through Income-Based Repayment or the new Repayment Assistance Plan, total and permanent disability discharge, and borrower defense claims under stricter rules.
What Happened to the Biden Forgiveness Plans
The signature Biden plan used emergency authority under the HEROES Act to cancel up to $20,000 per borrower. The Supreme Court blocked it in June 2023, holding that it exceeded the executive branch’s statutory power. Hours after the ruling, the administration pivoted to a rulemaking track under the Higher Education Act of 1965.2CBS News. What Is the Higher Education Act and Could It Still Lead to Student Loan Forgiveness
That second track produced the SAVE Plan, a new income-driven repayment plan that lowered monthly payments, stopped interest from accumulating when borrowers made their required payment, and shortened the road to forgiveness for smaller balances. A coalition of states sued, the Eighth Circuit blocked the entire rule, and the Supreme Court declined to lift the injunction.3Federal Student Aid. Stay Up-to-Date on Court Actions Affecting IDR Plans
Congress then made the court fight moot. The One Big Beautiful Bill Act directs the Department of Education to eliminate SAVE, PAYE, and ICR by July 1, 2028, and reverts borrower defense and closed school discharge regulations to their July 1, 2020 versions.1Federal Student Aid. (GEN-25-04) Federal Student Loan Program Provisions Effective Under One Big Beautiful Bill Act
The one Biden-era effort that ran its full course was the IDR Account Adjustment, a one-time recount of qualifying payments for borrowers shortchanged by servicer errors. It credited months spent in certain forbearance and deferment periods that servicers had failed to count. Borrowers who crossed 20 or 25 years of qualifying time received automatic discharges. That adjustment is complete, and any credit posted to your account remains there.4Federal Student Aid. Payment Count Adjustments Toward Income-Driven Repayment and Public Service Loan Forgiveness Programs
Public Service Loan Forgiveness
PSLF is the largest forgiveness program still operating. If you work full-time for a government agency or a qualifying nonprofit and make 120 monthly payments on your Direct Loans, the remaining balance is canceled. The 120 payments do not need to be consecutive, but each must be made after October 1, 2007 while you were employed in a qualifying job.5Office of the Law Revision Counsel. Title 20 USC 1087e – Terms and Conditions of Loans
Qualifying employers include any U.S.-based federal, state, local, or tribal government entity, section 501(c)(3) organizations, and certain other nonprofits that provide public services like emergency management, public health, or law enforcement. Labor unions and partisan political organizations do not qualify.6Federal Student Aid. Public Service Loan Forgiveness FAQs
Full-time means averaging at least 30 hours per week during the period you’re certifying, whether or not your employer calls that full-time. You can combine hours across multiple qualifying employers. Adjunct faculty paid by credit hour meet the threshold when their weekly credit or contact hours multiplied by 3.35 equal at least 30.7eCFR. 34 CFR 685.219 – Public Service Loan Forgiveness Program (PSLF)
The 2025 legislation preserved PSLF and confirmed that payments made under the coming Repayment Assistance Plan will count toward the 120-payment requirement. Borrowers moving from a legacy plan to RAP will not lose PSLF credit for time already served.
One development worth tracking: the current administration has introduced rules restricting PSLF credit for borrowers whose employers are found to have a “substantial illegal purpose,” and the Department of Education has signaled closer scrutiny of which organizations qualify as nonpartisan nonprofits. If your employer could fall into a gray area, certify your employment annually rather than waiting until you hit 120 payments. Discovering at payment 119 that two years don’t count is much harder to unwind than catching it early.
Income-Driven Repayment Forgiveness
Federal law still provides for forgiveness after 20 or 25 years of payments on an income-driven plan, depending on your loan type and when you borrowed. That framework predates Biden and survives the 2025 legislation, though the plan menu is changing.
Income-Based Repayment is now the primary path for borrowers with existing loans. The One Big Beautiful Bill Act removed the “partial financial hardship” requirement to enroll in IBR, opening the plan to people who previously earned too much to qualify. Payments are capped at 10 percent of discretionary income, and remaining balances are forgiven after 20 years for borrowers who took out their loans on or after July 1, 2014.
Parent PLUS borrowers picked up a new option. A Direct Consolidation Loan that repaid a Parent PLUS Loan can now enroll in IBR, which used to be off-limits for those borrowers. That eliminates the old “double consolidation” workaround; one consolidation now makes the borrower eligible.
The Repayment Assistance Plan Starting in 2026
By July 1, 2026 the Department of Education will launch the Repayment Assistance Plan, a new income-driven option created by the 2025 legislation. RAP is the only income-driven plan available for any loan disbursed or consolidated on or after July 1, 2026. Borrowers with older loans can enroll voluntarily, and anyone still on SAVE, PAYE, or ICR when those plans end in 2028 will be moved to RAP automatically, or to IBR for certain FFEL loans and Parent PLUS consolidation loans.
RAP works differently from earlier income-driven plans. Every borrower owes at least $10 per month, regardless of income or family size. Monthly payments are calculated as a percentage of your total adjusted gross income minus a $50 monthly deduction for each dependent. That departs from SAVE, which shielded all income below 225 percent of the federal poverty level and allowed $0 payments for low earners. Under RAP, even borrowers earning below the poverty line owe a small monthly amount.
RAP payments count toward both the plan’s own forgiveness timeline and toward PSLF’s 120-payment threshold.
Total and Permanent Disability Discharge
Borrowers who cannot work because of a total and permanent disability can have their federal student loans discharged entirely. Three types of documentation qualify you:
- A Department of Veterans Affairs finding that you are unemployable due to a service-connected disability.
- A Social Security Administration disability determination with a “medical improvement not expected” classification, meaning your next scheduled review is five to seven years away.
- A physician’s written certification that you are totally and permanently disabled.
The Department of Education runs automatic data matches with both the VA and SSA, so some borrowers receive discharge without ever filing an application.8Federal Student Aid. Automatic Total and Permanent Disability Discharge Through Social Security Administration Data Match If you qualify based on SSA or physician documentation, a three-year post-discharge period applies during which you cannot take out new federal student loans. The income monitoring requirement that used to apply during that period has been eliminated.
Disability discharges are permanently excluded from federal taxable income under section 108 of the tax code, regardless of when the discharge occurs.9Office of the Law Revision Counsel. Title 26 USC 108 – Income From Discharge of Indebtedness
Borrower Defense and Closed School Discharges
If your school misled you about job placement, program costs, credit transferability, or other material facts to get you to enroll, you can file a borrower defense claim to have your loans discharged. The Department of Education is processing claims again, but under the 1994 and 2016 regulatory frameworks rather than the Biden-era rules.10Federal Student Aid. School Notification Process Under the 1994 and 2016 Borrower Defense to Repayment Regulations
The 2025 legislation reverted borrower defense regulations to their July 1, 2020 versions for any loan originated before July 1, 2035. The practical effect is a higher bar for new claims: you generally need to show that your school made false statements with knowledge of their misleading nature, that the information was material to your decision to enroll, and that you suffered financial harm as a result.
Closed school discharge follows a simpler path. If your school shut down while you were enrolled or within a set window after you withdrew, you can cancel the loans tied to that program. The same legislation reverted closed school rules to their 2020 versions, which narrows the automatic-discharge window for students who did not transfer their credits.
The 2026 Tax Bill on Forgiven Loans
Here is where borrowers face a costly surprise. The American Rescue Plan Act temporarily excluded most student loan forgiveness from federal taxable income, but that provision covered only discharges between January 1, 2021 and December 31, 2025.11IRS Taxpayer Advocate Service. What to Know About Student Loan Forgiveness and Your Taxes It has expired.
Starting in 2026, a balance forgiven through an income-driven repayment plan is generally treated as taxable income. Someone with $80,000 forgiven after 20 years on IBR would see that $80,000 added to their income for the year, which could produce a federal tax bill of $15,000 or more depending on their bracket. The same treatment applies to forgiveness under RAP and any remaining legacy IDR plans.
Two categories stay permanently tax-free regardless of the year:
- PSLF forgiveness. Balances canceled after 120 qualifying payments in public service have always been excluded from taxable income under a separate provision of the tax code.
- Death and disability discharges, which are excluded from gross income under section 108.9Office of the Law Revision Counsel. Title 26 USC 108 – Income From Discharge of Indebtedness
State tax treatment varies. Some states follow the federal exclusions; others tax any forgiven balance under their own rules. If you expect a large discharge, talk to a tax professional before it posts so you can set money aside or plan an installment agreement with the IRS.
How to Apply
Every active program is administered through StudentAid.gov and the federal loan servicers. You will need a Federal Student Aid account with your Social Security number and a valid email address.
For PSLF, use the PSLF Help Tool to document your employment history and generate the certification form. Your employer receives a secure link to verify your dates of service and sign electronically. Submit certifications annually or whenever you change employers. If an employer refuses to sign or has shut down, you can still submit the form by checking the box indicating the employer will not certify and attaching supporting records like W-2s, pay stubs, or offer letters. Processing typically takes 30 to 90 business days.12Federal Student Aid. Public Service Loan Forgiveness (PSLF) Application Processing Time
For IBR or RAP, enroll at StudentAid.gov using your adjusted gross income from line 11 of your most recent Form 1040.13Internal Revenue Service. Adjusted Gross Income You must recertify your income each year. Missing that deadline can temporarily spike your payment to the standard 10-year amount. Borrowers with older Federal Family Education Loans or Perkins Loans need to consolidate into a Direct Loan first, and note that consolidating on or after July 1, 2026 limits you to two repayment options: the standard plan or RAP.
For disability discharge, the Department may cancel your loans automatically through its VA and SSA data matches. If you’re applying with a physician’s certification, start at StudentAid.gov or call the TPD Servicing department at 1-888-303-7818. Your doctor must certify that you cannot engage in substantial gainful activity due to a physical or mental condition that has lasted at least 60 months or is expected to result in death.
For a borrower defense claim, file at StudentAid.gov with as much documentation as you can gather: marketing materials, enrollment agreements, communications from the school, and any evidence contrasting what the school promised with what you experienced. Timelines are long and unpredictable, so continue making payments while your claim is pending unless your servicer has placed you in forbearance.