Trumpâs Student Loan Forgiveness: The 21st Century Hold-Up
After a scenic pause starting July 2025, the Education Department under Trumpâs watch is finally revving up the student loan forgiveness engine for 2 million folks on income-based repayment (IBR) plans. Borrowers got emails titled 'Youâre eligible to have your student loan(s) discharged,' promising debt relief 'over the next several months'âbecause who doesnât love suspense? Opt-outs close by October 21, presumably to avoid state tax bills turning forgiven debt into a financial boomerang post-1/1/26, thanks to the expiring American Rescue Planâs tax-free grace. Meanwhile, the Trump-era Education Department is busy gutting IBR plans down to two stingier options, as Collections restarted in May, signaling that loan nightmare sequel: The Debt Strikes Back.
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Student loan forgiveness hits pause for months, then teases with emails claiming 'youâre eligible.' Reality: wait until October 21 to maybe get mercy or face tax bills emerging from the twilight zone come 2026. Spoiler: Your payment misery continues.
IBR forgiveness promised to 2 million borrowers in a months-long limbo where emails say 'relief soon' but actually mean 'keep paying double until further notice.' The student loan karma wheel truly never stops spinning.
Trumpâs Education Dept restarted collections after a 5-year nap but now oddly offers to forgive loansâjust enough to confuse and tax you. It's like being handed a parachute with a hole in it before the free fall.
Source: Businessinsider | Published: 10/8/2025 | Author: Ayelet Sheffey
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