US Education Department Temporarily Pauses Student Loan Forgiveness Affecting Millions

The Trump administration has unveiled a significant overhaul of the Public Service Loan Forgiveness (PSLF) program, proposing to cut benefits for organizations deemed to be involved in "illegal activities," with the education secretary granted broad authority to define such activities, raising concerns about political motivations targeting groups serving immigrants and transgender youth. Simultaneously, the U.S. Department of Education has paused loan forgiveness under the Income-Based Repayment (IBR) program for about 2 million borrowers, citing the need to update systems in response to a federal court injunction affecting other income-driven repayment plans. This pause, unexpected given IBR's congressional authorization, has caused confusion and concern among borrowers, with no clear timeline for resumption and delays expected due to service backlogs. The administration defends these changes as fiscal responsibility measures to prevent taxpayers from subsidizing loans improperly forgiven, while critics argue that these moves undermine student loan relief and disproportionately harm public servants and vulnerable populations. The pause also aligns with a Trump-era spending law phasing out other forgiveness programs and introducing a 30-year Repayment Assistance Plan starting in 2026, further altering the student loan landscape. Borrowers are advised to monitor updates and approach forbearance cautiously, as paused payments may not count toward forgiveness and interest will accrue.