5 Big Student Loan Forgiveness Updates To Kick Off 2025

As the Biden administration winds down and Donald Trump prepares to return to the White House, the federal student loan system is more chaotic than ever. While millions of borrowers have received student loan forgiveness under Biden administration initiatives, others are seemingly stuck.

To make matters even more frustrating, the landscape for borrowers seems to be ever-changing. In addition to programs ending or shifting, many borrowers may see big increases in their monthly payments this year. And it doesn’t look like the turbulent environment is going to improve anytime soon.

Here are the biggest student loan forgiveness updates as we enter 2025, and what borrowers should keep an eye out for this year.

Latest Batch Of Student Loan Forgiveness Approved Under PSLF

Last month, the Biden administration announced that another 55,000 borrowers would receive student loan forgiveness through the PSLF program. Public Service Loan Forgiveness can wipe out the federal student debt for borrowers who work for nonprofit organizations or public employers for at least 10 years while complying with other rules of the program.

When Joe Biden first took office four years ago, fewer than 10,000 people had been approved for student loan forgiveness under PSLF. But the administration undertook a series of steps to improve the program through a combination of executive actions and regulatory updates. The results have been profound, with more than a million borrowers now having received student loan forgiveness through PSLF.

The future of PSLF is uncertain, and there have been calls by some Republicans to eliminate it. However, fully repealing PSLF would require an act of Congress, and it’s too soon to know at this juncture whether a repeal could pass, even with full Republican control of Washington. A prior PSLF repeal proposal during the first Trump administration never gained traction, and would have grandfathered in current borrowers.

Two IDR Plans Reopen As Student Loan Forgiveness Remains Blocked For The SAVE Plan

But while the PSLF program has been a bright spot for the Biden administration, other key student debt relief initiatives appear to be failing. The SAVE plan is one of them. Once touted as the most affordable income-driven repayment plan ever created — with low payments, interest subsidies, and several paths to eventual student loan forgiveness — the program is now mired in legal challenges. A court order issued by a federal appeals court last summer blocked the SAVE plan, and that remains in effect today. It looks increasingly likely that the program will ultimately get struck down by the courts or, if that doesn’t happen, repealed by the incoming Trump administration.

Millions of borrowers have been forced into a forbearance as a result of the court order, which has halted their progress toward student loan forgiveness. To give borrowers more options to get back on track, the Biden administration reopened the Pay As You Earn and Income-Contingent Repayment plans in December. PAYE and ICR had been sunsetted as part of the implementation of the SAVE plan. Reopening these plans gives borrowers more options to return to IDR so that they can resume progressing toward student loan forgiveness through both IDR plans as well as PSLF. However, student loan forgiveness at the end of a 20- or 25-year term remains blocked for both PAYE and ICR due to the SAVE plan legal challenges.

Biden Withdraws Two Other Student Loan Forgiveness Plans

Meanwhile, the Biden administration withdrew plans to enact two other mass student loan forgiveness initiatives. One, dubbed “Plan B” because it was effectively a backup option for Biden’s first plan that was struck down by the Supreme Court, could have benefited up to 30 million borrowers. “Plan B” student loan forgiveness was geared toward borrowers whose balances had ballooned due to interest accrual, and people who first entered repayment at least two decades ago. The administration had also unveiled a separate program that would have provided student loan forgiveness to people based on hardship.

But “Plan B” remained bogged down in its own legal challenge, while hardship-based student loan forgiveness could not have been implemented before Trump takes office. To prevent the establishment of unfavorable legal precedent, and to keep the Trump administration from tinkering with the program rules in ways that could possibly harm borrowers, the Biden administration opted to withdraw the proposed regulations for the two plans in December. This definitively means that these loan forgiveness programs will not be happening.

Education Department Pauses Student Loan Forgiveness Processing For TPD Program

As part of a long-planned overhaul of the federal student loan system, the Education Department announced that student loan forgiveness under the Total and Permanent Disability, or TPD, Discharge program would be temporarily suspended for several months starting in late December. The TPD Discharge program can eliminate the federal student loan debt for borrowers who cannot engage in significant gainful activity due to a disabling medical impairment.

The department is transitioning several loan forgiveness and discharge programs from external third-party servicers to StudentAid.gov, so that borrowers can work through a single web portal for more student loan-related issues, rather than a patchwork of contractors. The PSLF program went through a similar transition last year.

According to the Education Department, borrowers can still submit TPD Discharge applications during the transition. However, borrowers should not expect to receive determinations until after the overhaul has been completed, which is expected to happen this spring.

Student Loan Forgiveness Repeal For IDR Plans Is Proposed By House Republicans

As Republicans plan to take full control of Washington, the first item on their agenda will be to pass a reconciliation bill. The budget reconciliation process allows lawmakers to push through budget-related legislation and bypass the Senate filibuster, which would require 60 votes.

Republican lawmakers are still hashing out what will be included in the first reconciliation package, although most expect the bill to be primarily focused on extending or expanding 2017-era tax cuts, at a minimum. However, some Republican House leaders are pushing for student loan reforms to be included in the bill, too. One such proposal would eliminate time-based student loan forgiveness under IDR plans, replacing it with a different IDR plan that only forgives a borrower’s balance after they pay a certain amount back. The bill would also pare back several Biden administration student loan forgiveness rules (such as for the Borrower Defense to Repayment program), and curtail the Education Department’s authority to enact student loan forgiveness outside of strict authorizations. Some lawmakers are also calling for the Education Department to be abolished altogether.

It is far from clear at this juncture whether or not any of these elements, including student loan forgiveness repeal, will make it into the reconciliation bill. But borrowers should keep an eye on this — and we’ll probably know more by March.