"The Department of Education said in updated guidance posted to Federal Student Aid's website that it's moving forward with implementing some student-loan repayment provisions in President Donald Trump's "big beautiful" spending legislation. The latest update pertains to the eligibility requirements for income-based repayment plans. Prior to Trump's spending legislation, IBR plans, which give borrowers monthly payments based on their incomes with forgiveness after 20 or 25 years, had to demonstrate partial financial hardship."
"It required that a borrower's monthly payment based on their income is less than the amount needed to pay off their full balance over a 10-year period. That means borrowers with higher income-based payments, along with those on other repayment plans that the department is eliminating, would be eligible for IBR. Federal Student Aid's website said in its latest update that it anticipates the change will be completed in December 2025."
The Department of Education will remove the partial financial hardship requirement for income-based repayment (IBR) plans. Previously, IBR required that a borrower's income-based monthly payment be less than the 10-year standard repayment amount to qualify. Removing that requirement will allow borrowers with higher income-based payments and those on repayment plans being eliminated to enroll in IBR. Federal Student Aid anticipates completing the necessary system changes in December 2025. Servicers have been instructed to hold IBR applications that would otherwise be denied and to process those applications after the updates; affected borrowers are encouraged to reapply. IBR continues to base monthly payments on income and offers forgiveness after 20 or 25 years.
Read at Business Insider
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