IDR Loan Forgiveness Qualifications: How it Works

For over three decades, qualifying for IDR Loan Forgiveness was straightforward: pay a monthly amount based on your income and family size for 20 to 25 years, and the government promised to forgive whatever remained, no matter how large.

But in the first 100 days of President Trump’s second term, that promise fractured, leaving millions of borrowers uncertain. Those enrolled in popular plans like the SAVE Plan, Income-Contingent Repayment (ICR), Pay As You Earn (PAYE), and the newer Income-Based Repayment (IBR) Plan no longer have guaranteed forgiveness waiting at the end of the repayment period.

Now, the only reliable path left to secure IDR Loan Forgiveness is by switching back to the original Income-Based Repayment Plan.

Related: When Will IDR Account Adjustments Be Made?

To qualify under the updated rules, you must do two things:

• Enroll in the Original Income-Based Repayment Plan: This means selecting the first Income-Based Repayment program introduced in 2009, not the newer version of IBR or other plans like PAYE, REPAYE, SAVE, or ICR.

• Get credit for having made 300 qualifying payments: You’ll need credit for making 25 years’ worth of payments under IDR Plans. This includes credit you received under the one-time account adjustment for time spent in different repayment plans, and qualifying periods of deferment and forbearance.

Related: How to Use the IDR Forgiveness Tracker

The recent changes to IDR Loan Forgiveness qualifications are the direct result of a federal appeals court ruling combined with aggressive legislative action by Republicans in Congress.

In a recent decision, the 8th Circuit Court of Appeals questioned the legality of loan forgiveness under income-driven repayment plans like SAVE, PAYE, and Income-Contingent Repayment (ICR). While the court did not permanently eliminate those plans, the ruling forced the Department of Education to temporarily pause forgiveness under them, leaving millions of borrowers stuck in uncertainty.

Simultaneously, Republican lawmakers seeking to permanently end SAVE, PAYE, and ICR. Their proposal would automatically move affected borrowers to the original Income-Based Repayment (IBR) Plan, extending repayment terms from 20 to 25 years and potentially increasing monthly payments.

As a result, the original IBR Plan, explicitly authorized by Congress, has become the only guaranteed path to IDR loan forgiveness.

The impact of recent IDR loan forgiveness changes depends largely on your current situation.

Here’s how it breaks down for different borrowers:

If you’re currently enrolled in SAVE, PAYE, or the newer IBR plan:

You’ll likely pay more each month — and for longer — than you originally planned. Previously, borrowers in these plans paid 10% of discretionary income, with forgiveness after 20 years (or 25 for some graduate borrowers).

Now, being forced into the original Income-Based Repayment (IBR) means you’ll pay 15% of your discretionary income over a full 25 years. In short, your monthly payment goes up, and your timeline extends by five years.

If you’re not enrolled in an IDR Plan yet:

These changes limit your options. New borrowers won’t have access to the lower-cost PAYE, SAVE, or newer IBR plans. Instead, your only guaranteed path to forgiveness is the original IBR plan, with higher monthly payments and a longer repayment timeline.

If you have Parent PLUS loans and are on the ICR Plan:

Your path to forgiveness has become uncertain. For three decades, parents consolidating Parent PLUS loans relied on ICR as their only income-driven option.

Now, forgiveness under ICR is at risk due to ongoing court battles and proposed legislation.

Your best hope is that Congress passes legislation automatically shifting you from ICR into the original IBR Plan, preserving your forgiveness eligibility after 300 payments.

Related: How the GOP Proposal Affects Parent PLUS Loans

Nothing is final yet. The earliest these changes would officially take effect is late July, but it could be even later. The bill might stall over issues completely unrelated to student loans, like Medicaid/Medicare cuts, SALT deduction, or broader budget battles between the House and Senate.

And while Parent PLUS loan forgiveness under ICR is temporarily paused by court order, it’s not permanently eliminated, at least not yet. That could still change down the line, though it’s unlikely to reverse under the current administration.

At this point, there’s a lot still up in the air, and you’re probably feeling uncertain about your next move. If you need clarity about your specific situation and how to protect your loan forgiveness, book a call with one of our student loan experts.