IBR Discharge Updates: Processing Resumes & Opt‑Out Deadline
The Education Department has resumed student‑loan forgiveness processing for borrowers on income‑based repayment (IBR). Eligible borrowers received emails that their servicers will process relief “over the next several months.” Those who want to opt out must do so by October 21. For official program details, see Federal Student Aid and administrative notices in the Federal Register.
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Key Dates & Notices
What is IBR/IDR forgiveness?
Income‑based repayment plans set payments by income and can cancel remaining balances after 20 or 25 years, per federal program rules.
Why might someone opt out?
The email noted opting out could be considered to avoid a potential state tax liability. Opting out requires continued payments.
What about current plan changes?
The Department concluded its first week of negotiations on repayment changes on October 3. Proposals include consolidating existing IDR options into two alternatives (see Federal Register updates).
Is there a backlog?
Court records referenced more than 1 million pending IDR applications as of late August. During a federal shutdown, regular operations were expected to be limited.
