Trump's Student Loan Forgiveness: Halloween Treat or IRS Trick?
In a plot twist more surprising than a TikTok dance exploding overnight, the Department of Educationâyes, that playground of bureaucracyâhas resumed student-loan forgiveness processing for income-based repayment (IBR) borrowers as of October 23, 2024. Borrowers who grind through 20 to 25 years of painfully calibrated payments received emails saying, 'Congrats, your federal student loans are now as extinct as floppy disks.' This owes thanks to an impromptu summer pause caused by litigation and a lawsuit from the American Federation of Teachers, which unlike most lawsuits, actually seems to speed things up! Plus, thanks to the 2021 American Rescue Plan, these forgiven loans wonât invite a surprise tax billâat least until 2025, when the IRS and Treasury decide if they get veto power over your newfound debt freedom. Servicers are even refunding payments made past the forgiveness effective date, basically turning over coins found under couch cushionsâall in all, a bureaucratic miracle making borrowers question if 25 years of adulting was worth it or just a cosmic prank.
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20 to 25 years of income-based payments to un-invoice your student debt, but only after lawsuits, a months-long pause, and a government so slow it could outpace a snail on molasses. Meanwhile, IRS and Treasury reserve the right to snatch your forgiveness back like a plot twist no one asked for.
Student loans forgiven after 25 years of paymentsâbut only once government lawsuits gave the green light. Looks like bureaucracy takes its sweet revenge by delaying joy longer than your favorite showâs finale.
Congrats! Your loanâs canceled but IRS and Treasury hold the final say, like a hostage situation where youâre the unlucky hostage in the debt game show no one wants to win.
Source: Businessinsider | Published: 10/23/2025 | Author: Ayelet Sheffey
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