Student-loan forgiveness resumes for millions of borrowers after months on hold.

According to Business Insider, the U.S. Department of Education has resumed processing student-loan forgiveness for people enrolled in income-based repayment (IBR) plans. Over the past week, many borrowers began receiving emails from the department confirming they’ve met the required number of payments and now qualify for loan discharge.

The messages, which had the subject line “You’re eligible to have your student loan(s) discharged,” said that the department is working with loan servicers to process the relief “over the next several months.”

Income-based repayment is designed to make student-loan payments more manageable by tying monthly payments to a borrower’s income and family size. After 20 or 25 years of consistent payments, the remaining balance is eligible for forgiveness. According to Business Insider, as of mid-2025, about 2 million borrowers were enrolled in IBR plans. The Department of Education paused forgiveness processing in July 2025 to review payment counts and ensure their accuracy before resuming the program, AFROTECH previously reported.

Emails sent to borrowers explained that discharge information will be sent to loan servicers after Oct. 21, and servicers will then notify borrowers once their relief has been processed, per Business Insider.

“Your loan servicer will notify you if and when your IBR discharge has been processed,” one message said. “Most borrowers will have their discharge processed within two weeks, but for some borrowers, processing could take more time.”

Borrowers who do not want their loans forgiven must contact their loan servicer by Oct. 21 to opt out. Business Insider reports that some borrowers may choose to do so to avoid possible state taxes. Anyone who opts out of forgiveness must continue making payments on their loan balance.

There is added urgency to process forgiveness before the end of 2025. Under the American Rescue Plan Act of 2021, any forgiven student debt is tax-free at the federal level through Dec. 31, 2025. If forgiveness occurs after that date, the amount canceled could once again be taxed as income, leaving some borrowers with unexpected tax bills, Business Insider reports. The American Federation of Teachers, which represents many public employees with federal loans, recently filed a complaint urging the Department of Education to complete loan cancellations before the tax exemption expires, notes the outlet.

At the same time, the department is considering major changes to repayment programs under President Donald Trump’s administration, AFROTECH™ previously reported. It recently held negotiations to replace existing income-driven repayment (IDR) options with two less generous plans. The administration has also expanded its ombudsman’s office to help borrowers understand repayment options and restarted collections on defaulted student loans earlier this year, following a five-year pause, according to Business Insider.

“Unlike the previous Administration’s focus on loan forgiveness, the Trump Administration is taking action to implement meaningful and necessary enhancements to the way student loans are serviced to better serve borrowers and American taxpayers,” said James Bergeron, acting chief operating officer of Federal Student Aid, in a September press release statement.

For now, borrowers on income-based repayment plans are encouraged to check for official messages from their loan servicers, confirm their eligibility, and decide before Oct. 21 whether to accept or decline forgiveness. Those uncertain about possible tax implications may want to consult a financial or tax professional before making a decision.