The Trump administration has announced a significant policy shift, stating its intention to cancel student debt for millions of eligible borrowers under federal loan forgiveness plans. This move effectively reopens a pathway to debt relief that the government had previously blocked. The decision reportedly follows an agreement reached with the American Federation of Teachers (AFT), enabling the White House to commence processing student loan forgiveness applications.
Under this revised policy, borrowers enrolled in two specific income-driven repayment plans—Income-Contingent Repayment and Pay as You Earn—are now eligible for student loan forgiveness. The administration had previously paused forgiveness under these programs, citing a court order that affected the Biden-era Saving on a Valuable Education (SAVE) plan. The US Department of Education has clarified that borrowers qualifying for student loan forgiveness this year will not incur federal taxes on the relief received.
Source: https://www.livemint.com/news/us-news/white-house-agrees-to-forgive-student-loans-millions-of-borrowers-to-get-debt-relief-11761008880933.html