In a significant move for borrowers, President Donald Trump’s Department of Education has agreed to process over two million additional Student Loan Forgiveness claims under income-driven repayment (IDR) and public service programs.
The agreement, reached with the American Federation of Teachers (AFT) on October 17, marks a major development in the ongoing battle over student debt relief — and could shield some borrowers from facing new taxes in 2026.
Student Loan Forgiveness Agreement Reached
According to court filings in AFT v. U.S. Department of Education, the Department of Education agreed to resume processing forgiveness applications for borrowers who have reached their repayment milestones under income-driven plans such as:
- Income-Based Repayment (IBR)
- Income-Contingent Repayment (ICR)
- Pay As You Earn (PAYE)
Additionally, the agreement ensures continued buyback processing for the Public Service Loan Forgiveness (PSLF) program, allowing borrowers to “buy back” time spent in deferment or forbearance if it helps them reach the required 120 qualifying payments for full debt cancellation.
