The Department of Education has paused the Income Based Repayment plan (IBR) in another significant move that alters the student loan repayment process for millions of Americans.
The IBR plan cancels loan debt in full for borrowers who’ve made 300 monthly payments — or about 25 years of payments. After that 25-year period, the plan cancels any outstanding balances and considers the borrowers’ repayment obligation to be satisfied. Student loan advocates tell ABC News that borrowers are still being billed when their student loan should already be cancelled under the plan.
“As of today, if you have been in debt for 25 years, you have a right under federal law to get your debt canceled, and the government is not honoring that law,” Student Borrower Protection Center (SBPC) Executive Director Mike Pierce said.
This plan was statutorily mandated under the Higher Education Act and encouraged by the Trump administration’s Education Department while the agency launches its new Repayment Assistance Plan. The recent pause was not announced but is listed on a Frequently Asked Questions page of the Federal Student Aid site. It is now causing worry and confusion for borrowers who have been left in the dark, according to student loan experts.
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Pierce said the government suspended the forgiveness plan for reasons that the administration hasn’t explained.
“We don’t know how many people are affected by it, we don’t know how many people will be affected by it in the future, we don’t know why it’s happening,” Pierce told ABC News.
“We’re worried that this is just the Trump administration deciding that its judgment is more important than the judgment of Congress, and it’s going to do whatever the hell it wants,” Pierce added.
ABC News has reached out to the Department of Education for comment on the communication of the IBR plan pause.
Under the recent pause, IBR accounts are being audited for the number of qualifying payments it has received.
Abby Shafroth, managing director of advocacy at the National Consumer Law Center (NCLC), called the pause both surprising and concerning for borrowers as many have met the qualifying number of payments, but say that they’re still getting billed.
“It has sort of quietly come out that [IBR is] still not giving people cancellation,” Shafroth told ABC News.
Shafroth described the situation as a “mess.” She noted the IBR plan is the one program that the current Education Department has encouraged borrowers to enroll in, has said will provide debt forgiveness and that Congress clearly established and mandated.
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“The Department of Education really has to own this and fix it,” Shafroth said.
“If they don’t fix it, it’s both going to break down trust and it’s going to cost a lot of people more money. I don’t know how many people, but it’s going to cost people more money,” she said.
According to Shafroth, borrowers will keep getting billed on debts that they no longer owe and, as a result, they could end up having to pay large tax bills in their 2026 tax year.
IBR is one of four Income Driven Repayment plans that takes a percentage of your income for monthly payments, including the Pay As You Earn (PAYE), Income Contingent Repayment and the Savings on a Valuable Education or “SAVE” plans. Borrowers on the Biden-era SAVE plan — about 7.7 million people — will have interest charges return on Aug. 1 at the same time the Education Department said it’s complying with a federal court injunction that blocked implementation of the plan.
The interest restart comes as President Donald Trump recently signed into law his signature domestic policy agenda, the One Big Beautiful Bill Act, which included a provision to terminate all current student loan repayment plans — such as SAVE and other IDRs — for loans disbursed on or after July 1, 2026. The plans will be replaced with two separate repayment plans: a standard repayment plan and the Repayment Assistance Plan, a new income-based repayment plan. However, these repayment plans are currently affected by legal challenges, according to a release from the department.
The Education Department’s recent student loan adjustments signal the Trump administration’s shift away from former President Joe Biden’s debt forgiveness plans. The department will create a Reimagining and Improving Student Education (RISE) Committee to address its upcoming changes. Secretary of Education Linda McMahon said she wants to simplify the overly complex system.
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Contrary to borrower fears, McMahon told ABC News her agency’s reforms aren’t meant to be “punitive” nor does she want to see borrowers defaulting on loans.
“When you are in default on a loan, you can’t buy a house, you can’t buy a car, so call [the department],” McMahon said, adding, “Just make sure that you are on the right repayment plan.”
“Be proactive and get back into one of the payment plans,” she said.
Meanwhile, Shafroth said this pause in the IBR plan potentially makes borrowers more distrustful and, in turn, further divides the borrower and the government.
“It really alienates borrowers, and they stop trusting the government and stop, in some cases, repaying, or, you know, being responsive on their loans,” she said.
SBPC’s Pierce warned this is a legal matter that borrowers are entitled to having resolved.
“People with student loans do still have rights under the law, including the right to get their debt cancelled,” Pierce told ABC News.
“It’s important for borrowers to understand that the Trump administration can’t wish that away.”
