Federal student loans are disappearing - but only for borrowers who did this one thing

"Some borrowers have been receiving notices in recent weeks that read: "You are now eligible to have some or all of your federal student loan(s) discharged because you have reached the necessary number of payments under your Income-Based Repayment (IBR) Plan." The IBR plan, first introduced in 2007, offers debt cancellation after 20 or 25 years of repayment, depending on the age of the loans. Nearly 2 million borrowers were enrolled in this program as of the second quarter, according to Federal Student Aid figures."

"Notices emailed to borrowers go on to inform them that the U.S. Department of Education will work with their loan servicer to process the discharge over the next several months. If for some reason borrowers want to opt out of IBR forgiveness, they must contact their loan servicer by Oct. 21. While advocates for debt relief may cheer the news, these notices indicate that IBR forgiveness has resumed after about three months."

"In July, the Federal Student Aid quietly announced that forgiveness had been paused so its systems could be updated to accurately the number of months paid, blaming litigation related to a forgiveness plan instituted during former President Joe Biden 's administration. As a result, the debt forgiveness notices are simply the resumption of the IBR program, rather than a new forgiveness plan. On the campaign trail last year, President Donald Trump called student loan forgiveness "vile" and "not even legal." Education Secretary Linda McMahon has vowed that a mass forgiveness program won't happen during her tenure."

Federal borrowers enrolled in the Income-Based Repayment (IBR) plan who have made the required payments are being notified that some or all of their loans will be discharged. The IBR plan, created in 2007, forgives remaining debt after 20 or 25 years depending on loan age, and nearly two million borrowers were enrolled as of the second quarter. Notices say the Department of Education will coordinate with loan servicers to process discharges, and borrowers who wish to opt out must contact their servicer by Oct. 21. IBR forgiveness resumed after a roughly three-month pause tied to system updates and litigation. The notices arrived amid a federal government shutdown and follow political opposition to broad cancellation from current officials.

Read at Fast Company