Changes coming to IDR: A law was passed on July 4, 2025, that makes several changes to borrowers’ repayment options. The new Repayment Assistance Plan (RAP) will replace most existing IDR plans (including SAVE, PAYE, and ICR) by July 1, 2028. The IBR plan will also be available for existing borrowers who don’t take out or consolidate any loans after July 1, 2026. Additionally, the law ends most Parent PLUS borrowers’ access to any IDR plan unless they consolidate before July 1, 2026, and are enrolled in an IDR plan before July 1, 2028.
Current borrowers should understand how these changes may impact them and pay attention to upcoming deadlines to avoid missing out on current benefits.
Under an income-driven repayment (IDR) plan, you may be eligible to have any remaining balance on your student loans automatically canceled or forgiven after 20 to 30 years. This depends on the plan you’re enrolled in and when you borrowed. If you qualify for PSLF, you may also be eligible to have your loans forgiven in 10 years.
When Will My Loans Be Canceled or Forgiven Through IDR?
It will depend on which plan you are enrolled in and, for IBR, when you borrowed your loans. Depending on your income and how much you owe on your loans, you may be able to pay off your debt sooner than IDR loan forgiveness. Currently, there are four IDR plans: SAVE (replacing the REPAYE plan), PAYE, IBR, and ICR.
There are going to be significant changes to the repayment plans over the next two years, and SAVE, PAYE, and ICR will be eliminated by July 1, 2028. IBR will be available for some borrowers after the other plans are eliminated. Additionally, a new IDR plan, the Repayment Assistance Plan (RAP), will be available starting around July 1, 2026. All borrowers, except for borrowers with Parent PLUS Loans (or consolidation loans that contain Parent PLUS Loans), will be eligible for RAP.
When will my loans be canceled under the SAVE plan?
Unfortunately, court cases challenging the SAVE plan have blocked cancellation under this program for the time being, and SAVE will be eliminated entirely by July 1, 2028. Borrowers will also not receive any credit toward IDR cancellation for months on the SAVE forbearance. If you are on the SAVE plan, consider switching to a different IDR plan to continue earning credit toward IDR cancellation.
When will my loans be canceled under the IBR plan?
If you continue to make payments under IBR, any remaining balance on your loans will be canceled after:
- 20 years of payments if you were a new student loan borrower on or after July 1, 2014, or
- 25 years if you took out student loans before July 1, 2014.
Any payments borrowers have made in another IDR plan before switching to IBR will count towards forgiveness in IBR.
When will my loans be canceled under the ICR plan?
If you continue to make payments under ICR, any remaining balance on your loans will be canceled after 25 years of payments. The ICR plan will be eliminated by July 1, 2028. At that time, borrowers who have not already switched to a different plan will be automatically transferred to a new IDR plan (RAP or IBR). Payments borrowers have made in ICR will count toward forgiveness in RAP and IBR.
When will my loans be canceled under the PAYE plan?
If you continue to make payments under PAYE, any remaining balance on your loans will be canceled after 20 years of payments. The PAYE plan will be eliminated by July 1, 2028. At that time, borrowers will be automatically transferred to a new IDR plan (RAP or IBR). Payments borrowers have made in ICR will count toward forgiveness in RAP and IBR.
When will my loans be canceled under the RAP plan?
RAP is a new plan that will be made available around July 2026. If you continue to make payments under RAP, any remaining balance on your loans will be canceled after 30 years of payments. Any payments borrowers have made in another IDR plan before switching to RAP will count towards forgiveness in RAP.
Do I Need to Apply for IDR Loan Forgiveness?
No. IDR loan forgiveness is automatically granted after you make your last qualifying IDR payment.
You do need to make sure you are on an IDR plan or the standard repayment plan to keep earning credit toward IDR loan forgiveness. In many cases, your monthly repayment amount will be lower in an IDR plan than it would be in a standard plan. For more information, see our pages on IDR payment plans.
If you think you should have already been eligible for IDR loan forgiveness but didn’t receive it, you may wish to contact your loan servicer. If you believe your loan servicer has not given you credit for all of your qualifying months in repayment, you might consider filing a complaint with the FSA Ombudsman or seeking legal help.
Will I Have to Pay Taxes on Any Loan Amount That is Forgiven Under the IDR Plan?
Through the end of 2025, there are no federal income tax consequences for having your student loans forgiven through an IDR plan. However, this protection is scheduled to expire at the end of 2025. That means that any student loan debt that is forgiven through IDR after January 1, 2026, will generally be treated as taxable income under federal law.
The Department of Education has also said that if you met the criteria for loan forgiveness in 2025 (for example, if you had 25 years of qualifying payments and applied to enroll in IBR or ICR), then it will treat your loan forgiveness as occuring in 2025 even if your loans aren’t actually forgiven until 2026—which should likely protect you from any federal income tax consequences.
You should speak with a tax professional for more information about any tax implications.
