Trump Reopens Path to Student Loan Forgiveness, but Only Until 2028

In March of 2025, the AFT, a teachers' union, filed a lawsuit against the Trump administration for blocking some student loan forgiveness programs. Per CNBC, Trump had previously paused loan forgiveness under some income-driven repayment plans, or IDR plans.

IDR plans determine the borrower's monthly payments based on their income, eventually canceling the leftover debt after 20 or 25 years, according to the New York Times. Trump has now agreed to reopen these programs.

"This is a tremendous win for borrowers. With today’s filing, borrowers can rest a little easier knowing that they won’t be unjustly hit with a tax bill once their student loans are finally canceled, pursuant to federal law,” said Winston Berkman-Breen, Protect Borrowers legal director.

Per the AFT's press release, the Department of Education must also process IDR and PSLF buyback applications, even if borrowers do not have a partial financial hardship.

The administration clarified that if people become eligible for loan forgiveness in 2025, they won't have federal taxes on that relief, per CNBC.

AFT President Randi Weingarten said, "Our agreement means that those borrowers stuck in limbo can either get immediate relief or finally see a light at the end of the tunnel. And, crucially, they won’t ever get taxed on that relief."

Borrowers can log into their accounts on StudentAid.gov to check on their federal student loans, according to the New York Post. Select "My Aid" or "View Details" in order to see whether your loan falls into one of the categories that provide loan forgiveness.

AFT President Randi Weingarten said, "The AFT will hold the federal government to its word, and we won’t stop fighting until college is affordable and taking out a student loan doesn’t trap millions of Americans in a ruinous and exploitative debt cycle."

Part of Trump's "Big Beautiful Bill" will stop income-driven repayment plans and "pay as you earn" repayment plans on July 1, 2028.