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 before you would reach IDR loan forgiveness.
Currently, there are four IDR plans:
- IBR,
- ICR,
- PAYE, and
- the new RAP plan.
The SAVE Plan is ending—borrowers enrolled in the SAVE plan need to switch to another plan to be eligible for forgiveness. ICR and PAYE will end by July 1, 2028, and borrowers in those plans will need to switch to other plans to be eligible for forgiveness when those plans end.
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 the 10-year standard plan and in most IDR plans will count towards forgiveness in IBR. But payments made in RAP will not count toward 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 PAYE 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 in 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, or in the 10-year standard plan, or in the Tiered Standard 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 may need to be enrolled in the IDR plan to qualify for forgiveness.
If you think you should have already been eligible for IDR loan forgiveness but didn’t receive it, contact your loan servicer. If you believe your loan servicer has not given you credit for all of your qualifying months in repayment, 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 were no federal income tax consequences for having your federal student loans canceled. That means any loans forgiven under IDR through the end of 2025 will not be subject to federal income tax.
However, this protection expired at the end of 2025. That means that any student loan debt that is forgiven through IDR on or after January 1, 2026, will generally be treated as taxable income under federal law. That can result in a significantly higher federal tax bill for the tax year in which the forgiveness occurs. It may also result in higher state tax bills. But you may be eligible for tax relief, for example, if you qualify for an insolvency exception.
The Department of Education has also said that if you met the criteria to qualify for IDR forgiveness in 2025, then it will treat your loan forgiveness as occurring in 2025 even if your loans aren’t actually forgiven until 2026. This should likely protect you from any federal income tax consequences if your loan qualified for forgiveness in 2025.
Speak with a tax professional for more information about any tax implications of IDR forgiveness.
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.
