
In a major policy pivot set to benefit millions of US student loan borrowers, the Department of Education has restarted forgiveness processing for income-driven repayment (IDR) plans, including the Income‑Contingent Repayment (ICR) and Pay As You Earn (PAYE) programmes, thanks to a settlement with the American Federation of Teachers (AFT) filed on 17 October 2025.
Borrowers who reached eligibility in 2025 will now have their discharge date back-dated and protected from tax liability under the American Rescue Plan Act tax-free forgiveness window.