The student loan forgiveness path has changed. Here’s what you need to know

Recent impending changes to the U.S. Department of Education’s student loan repayment plan will impact whether and when millions of borrowers will have their debts canceled.

New rules for the government’s income-driven repayment plans (IDR) stem from President Donald Trump’s One Big Beautiful Bill Act and other policy developments.

“We encourage all borrowers to evaluate their repayment options to see which plan is best for them moving forward,” said Landon Wormund, a certified financial planner and certified student loan specialist with Reliant Financial Services in Kansas City, Missouri.

“Proactive planning is always important, and now until July 1 is the time to do it,” said Valmund, who is also a member of CNBC’s Financial Advisor Council.

Congress created the first IDR plans in the 1990s to make bills more affordable for student loan borrowers. Historically, this plan limits people’s monthly payments to a portion of their discretionary income and erases the remaining debt after a set period of time (usually 20 or 25 years).

More than 12.5 million student loan borrowers enrolled in IDR plans in the first quarter of 2026, according to an analysis by higher education expert Mark Kantrowitz.

According to the Congressional Research Service, more than 42 million Americans have student loans, totaling more than $1.6 trillion in debt.

Here’s what you need to know about getting your student loans forgiven, despite all the variables involved.

The only IDR plan that still results in student loan forgiveness is the income-based repayment plan (IBR), Kantrowitz said.

IBR will be the best option for many borrowers looking for another affordable repayment option now that SAVE plans are not available, and until a new plan, RAP, launches this summer. A federal appeals court earlier this year ended the Biden administration-era SAVE program.

Under the terms of the IBR, borrowers will pay 10% of their discretionary income each month for loans taken after July 1, 2024. For borrowers who took out loans before that date, that percentage rises to 15%. New borrowers will be eligible for debt forgiveness after 20 years, and older borrowers will be eligible for debt forgiveness after 25 years.

The Trump administration also recently updated the IBR. Previously, student loan borrowers had to prove “partial financial hardship,” or income below a certain level, to participate in the plan. The Department of Education announced in April that that requirement is now waived.

Income-contingent repayment plans (ICR) and PAE (Pay as You Earn plans) are available to borrowers for a limited period of time, but neither program ultimately results in debt forgiveness.

Carolina Rodriguez, director of the Education Debt Consumer Assistance Program in New York, said the only reason you might want to sign up for one plan or the other is because it will give you the lowest monthly payment.

If so, you can continue using ICR or PAYE until your plan expires on July 1, 2028. Then, if you switch to an IBR or Repayment Assistance Plan (RAP), you should receive credit toward forgiveness of your previous payments.

“You have until 2028 to transition your plan, but you can still benefit from lower payments,” Rodriguez said.

Starting July 1, student loan borrowers can also pursue student loan forgiveness under the RAP plan.

The more you earn with RAP, the larger the monthly payments you’ll need. Charges typically range from 1% to 10% of revenue. There will also be a $10 minimum monthly payment for all borrowers. In other IDR plans, certain low-income individuals are entitled to payments of $0 per month.

RAP enrollees are not eligible for student loan forgiveness until they have completed 30 years of payments, compared to the typical 20- or 25-year schedules of other IDR plans. As a result, experts say borrowers should weigh the monthly payments and waiting periods for forgiveness under different plans and decide whether lower bills or faster debt forgiveness makes more sense for them.

There is one more important thing to note. Based on several experts’ interpretations of the new law, it is unclear whether you will receive forgiveness credit for time spent in a RAP if you later transfer to another IDR plan. The U.S. Department of Education did not respond to a request for comment on the details.

Current borrowers will maintain access to some existing repayment plans, including IBR. However, those who borrow after July 1, 2026, have only two options: RAP and a tweaked standard repayment plan that does not include a debt forgiveness element.

Waiting years or even decades for student loan forgiveness can be daunting. That’s why it’s also worth checking to see if you qualify for federal or state debt relief programs, consumer advocates say.

The Public Service Loan Forgiveness Program, signed into law by President George W. Bush in 2007, provides debt forgiveness to nonprofits and government employees after 10 years.

“If you’re pursuing PSLF, it doesn’t matter what IDR plan you’re in, because the PSLF program provides a 10-year path to forgiveness, regardless of plan,” said Nancy Nierman, EDCAP’s assistant director.

“Borrowers who have a choice should choose the cheapest plan,” Nearman said.

Another option for educators is the Teacher Loan Forgiveness Program. It provides up to $17,500 in loan cancellation to those who work at low-income schools and meet other requirements.

Experts encourage borrowers to consider the many state-level relief programs available. The Institute of Student Loan Advisors has a database of student loan forgiveness programs by state.