Millions of borrowers could soon lose access to popular student loan forgiveness programs. Republican lawmakers, the Department of Education, and the Trump administration are pushing plans to eliminate several major debt relief options.
Here’s the latest student loan forgiveness update as of May 8, 2025.
Forgiveness plans facing repeal
New Republican proposals target several income-driven repayment (IDR) plans:
- SAVE, PAYE, and ICR plans would be fully repealed.
- Borrowers in these plans would be moved into the IBR plan, which has stricter terms.
The SAVE, PAYE, and ICR plans allow forgiveness after 20 or 25 years. IBR, however, requires 25 years of repayment and often results in higher monthly payments.
Parent PLUS borrowers would lose options
The GOP proposal also impacts Parent PLUS borrowers. By ending the ICR plan — the only income-driven option for Parent PLUS loans — many would lose their path to forgiveness.
- Borrowers already enrolled in ICR would shift to IBR.
- Others would no longer qualify for income-driven repayment or Public Service Loan Forgiveness (PSLF).
Medical and dental residents affected
Medical and dental residents could be excluded from PSLF under the new legislation. Even if they work at nonprofit hospitals, these workers would not earn PSLF credit during residency.
This change would make it harder for healthcare professionals to manage their student loan debt during the early years of their careers.
Restrictions for nonprofit employers
President Trump recently signed an executive order narrowing PSLF eligibility. Under the order:
- Nonprofits involved in immigration work, gender-affirming care, or diversity initiatives could lose access to PSLF.
- Critics argue the order is vague and may exclude broad categories of public service workers.
The Department of Education has started a rulemaking process to implement these changes, but any new rules could take a year or more.
What happens next?
Borrower advocates are already pushing back. Legal challenges are likely if the administration tries to limit loan forgiveness without clear congressional approval.
For now:
- Borrowers in SAVE, PAYE, or ICR should monitor developments closely.
- Parent PLUS borrowers may want to seek financial counseling.
- Healthcare workers should check if their employer remains eligible for PSLF.
Borrowers can stay updated by visiting Federal Student Aid.
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