Student Loan Forgiveness Will Be Repealed For These 4 Groups Under GOP Plans

Republicans in Congress, at the Department of Education, and in the White House are advancing an array of proposals that threaten to diminish or eliminate multiple federal student loan forgiveness programs. If enacted, advocacy organizations warn that the consequences for borrowers could be devastating, leading to higher payments and decades trapped in debt.

The attack on student loan forgiveness programs is three-pronged. Last week, Republican lawmakers in Congress advanced legislation that would make major changes to key federal student loan forgiveness and repayment programs, and cut off debt relief entirely for certain borrowers. Simultaneously, the Department of Education initiated a rulemaking process that could eventually result in three separate student loan programs being diminished or eliminated. And President Donald Trump has targeted a popular federal student loan forgiveness program for public service borrowers both directly and indirectly, leading to questions about its future. Here’s a breakdown.

Student Loan Forgiveness Would End for SAVE, PAYE, And ICR Plans

Under legislation proposed by House Republicans, the SAVE, PAYE, and ICR plans would all be repealed. These are popular income-driven repayment programs that provide borrowers with monthly payments based on their income and family size. Borrowers enrolled in these plans can qualify for student loan forgiveness, typically after 20 or 25 years in repayment. The plans also qualify for Public Service Loan Forgiveness, a separate program that allows borrowers working for nonprofit or government organizations to eliminate their student debt in as little as 10 years.

Student loan forgiveness under SAVE, PAYE, and ICR has been paused by the Department of Education since a federal appeals court issued an order last summer blocking the SAVE plan and questioning the legality of loan forgiveness under PAYE and ICR. All three repayment plans were created under the same statue enacted by Congress in 1993.

“Forgiveness as a feature of the SAVE, PAYE, and ICR Plans is currently paused, because those plans were not created by Congress,” says current Department of Education guidance.

The new bill proposed by House GOP leaders would fully repeal these three repayment plans, including for current borrowers. Separately, the Department of Education initiated a lengthy negotiated rulemaking process last week that also targets the PAYE and ICR plans for potentially significant regulatory changes.

Under the House Republican proposal, borrowers currently enrolled in SAVE, PAYE, and ICR would be automatically moved into the IBR plan instead, which is a separate program created by Congress. Payments that counted towards student loan forgiveness under SAVE, PAYE, and ICR would also count for the IBR plan. However, IBR would result in higher monthly payments for many of these borrowers, as well as an additional five years in repayment, since IBR has a 25-year term instead of 20-years for PAYE and certain SAVE borrowers. Alternatively, borrowers could opt into a new income-driven plan that the new GOP legislation would create, but borrowers wouldn’t qualify for loan forgiveness under that program until they have been in repayment for at least 30 years.

No Student Loan Forgiveness Path For Many Parent PLUS Borrowers

The GOP legislative proposal would also effectively cut off many Parent PLUS borrowers from student loan forgiveness. By repealing the ICR plan – which is the only income-driven repayment plan available to Parent PLUS borrowers under federal law – the legislation would effectively block any pathway to student loan forgiveness for these borrowers, since Parent PLUS loans would not be eligible for the new income-driven repayment plan envisioned in the bill.

Existing Parent PLUS borrowers who have already consolidated their loans and enrolled in ICR (Direct loan consolidation is a pre-requisite for ICR enrollment for Parent PLUS loans) would essentially be grandfathered in and automatically moved to IBR upon ICR’s repeal. But all other Parent PLUS borrowers would have no mechanism to make income-based payments or pursue loan forgiveness. Income-driven repayment is also typically a requirement for borrowers pursuing PSLF, so by blocking income-driven repayment, the bill would also effectively block PSLF for Parent PLUS borrowers, as well.

No Student Loan Forgiveness Credit Under PSLF For Medical And Dental Residents

The House GOP legislation also would take the unprecedented step of singling out certain borrowers for exclusion from the PSLF program. The bill, if enacted, would prevent medical and dental residents, as well as interns, from receiving credit towards student loan forgiveness under PSLF, even if they are working in qualifying employment. Medical and dental residents typically earn low salaries while working long hours at public and nonprofit hospitals and other healthcare facilities.

No Student Loan Forgiveness Under PSLF For Organizations Engaged In Certain Activities

In March, President Donald Trump issued an executive order to restrict student loan forgiveness under the PSLF program for organizations that the administration says engage in improper or illegal activities. The order suggests that organizations that facilitate the violation of immigration laws, provide gender-affirming care to transgender youth, facilitate “illegal discrimination” (which could be interpreted to include DEI initiatives), or engage in “public nuisance” could be cut off from the PSLF program.

Critics have argued that the order is so broad and vague that it could result in entire categories of public and nonprofit organizations being kicked out of a key federal student loan forgiveness program simply for engaging in activities that the Trump administration opposes. Some legal observers have argued that neither the president nor the Department of Education have any authority under the PSLF statute passed by Congress to limit the eligibility of otherwise-qualifying employers, and that implementing the executive order as drafted may be an unconstitutional infringement on speech.

Nevertheless, last week the department initiated a rulemaking process to change the regulations for the PSLF program, likely to incorporate elements of President Trump’s order. This is the same rulemaking process that is also targeting the PAYE and ICR plans. Any rule changes would likely be at least a year away. Separately, the Trump administration has also suggested removing the tax-exempt status of certain nonprofit organizations such as Harvard University, potentially jeopardizing loan forgiveness under PSLF on an even broader scale.

“We stand in strong opposition to the Trump Administration’s attempts to implement Project 2025, which calls for gutting Income-Driven Repayment (IDR) options and eliminating Public Service Loan Forgiveness (PSLF),” said Persis Yu, Deputy Executive Director and Managing Counsel at the Student Borrower Protection Center, in a public comment submitted for the initial rulemaking session targeting student loan forgiveness programs. “Let’s be clear, the Trump Administration’s assault on IDR and PSLF isn’t reform—it’s retaliation. These actions would force nurses, teachers, veterans, and others who have dedicated their careers to serve our communities, to choose between paying their monthly student loan bills… and putting food on their tables. Borrowers everywhere would be driven further into debt, while relief is pushed further out of reach.”