In the United States, a new wave of individuals can now benefit from student loan forgiveness.
Earlier this year, the American Federation of Teachers (AFT) initiated legal action against the White House after the Department of Education halted the processing of applications for various affordable student loan repayment programs, which included options for loan forgiveness.
Representing nearly two million union members, the AFT contended that the White House’s actions were a breach of federal law. As a result, borrowers were left with only the Income-Based Repayment (IBR) plan as an option.
Randi Weingarten, the president of the AFT, criticized the administration’s decision, stating (via The Guardian): “By effectively freezing the nation’s student loan system, the new administration seems intent on making life harder for working people, including for millions of borrowers who have taken on student debt so they can go to college.
“The former president tried to fix the system for 45 million Americans, but the new president is breaking it again.”
Following discussions, the AFT and the Department of Education arrived at a consensus on Friday (October 17).
According to the agreement, the Trump administration affirmed that it would resume processing student loan forgiveness for those eligible under the original Income-Contingent Repayment (ICR) and Pay as You Earn (PAYE) plans.
As reported by CNBC, more than 2.5 million borrowers are currently enrolled in either the ICR or PAYE programs.
However, both ICR and PAYE are slated for discontinuation in July 2028 as part of a broader legislative package.
Meanwhile, individuals can verify their eligibility for student loan forgiveness through the Federal Student Aid website.
It outlines: “In certain situations, you can have your federal student loans forgiven, canceled, or discharged. That means you won’t have to pay back some or all of your loan(s).”
Specific public service professions are eligible for loan forgiveness, including government employees, teachers, and individuals working for non-profit organizations.
Teacher loan forgiveness addresses student debts of up to $17,500. To be eligible, individuals must ‘teach full time for five complete and consecutive academic years in a low-income elementary school, secondary school, or educational service agency’, according to Federal Student Aid.
Additionally, having a Direct Loan or Federal Family Education Loan (FFEL) Program loan is required for qualification.