Income-driven repayment plan forgiveness is automatic after 10 to 20 or 25 years, depending on your plan.
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Income-driven repayment, or IDR, plans cap your monthly student loan payments at a portion of your discretionary income . IDR plans may also extend your repayment term from 10 years to 20 or 25 years, depending on the size and type of your student debt. At the end of the repayment term, your remaining balance is automatically forgiven.
To benefit from this forgiveness, you first must enroll in one of the four IDR plans available to borrowers. The process takes about 10 minutes, according to the Federal Student Aid office. You can apply online at StudentAid.gov/IDR , or contact your student loan servicer for personalized guidance.
After enrolling in an IDR plan, you must recertify your income annually or whenever it changes, unless you gave consent during the application process for your tax information to be accessed. If so, your recertification will automatically renew. You will receive notice before a new payment amount goes into effect.
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Compare RatesMost federal direct loan borrowers are eligible for Saving on a Valuable Education (SAVE), which is generally the most affordable IDR plan. One key exception: Parent PLUS borrowers, who may only enroll in the Income-Contingent Repayment plan.
There’s no cap on the amount of student debt that an IDR plan can forgive.
The amount of student debt you have at the time of forgiveness depends on how much you’ve already repaid over the life of your loan. If your income increases over time, and/or you have a small amount of debt, you could repay your loans entirely before the IDR term expires. In this case, none of your debt would be forgiven.
Use the Education Department's loan simulator to estimate your student loan payments and potential forgiveness under different repayment options, including IDR plans.
The federal government will not treat debt forgiven by an IDR plan as taxable income through 2025. However, a few states still tax student loan forgiveness .
The government has forgiven roughly $45.6 billion in student loans for 930,500 borrowers through improvements to income-driven repayment plans, as of March 2024.
In 2021, only 32 borrowers had ever received IDR loan forgiveness, according to an analysis of federal data by the Student Borrower Protection Center and the National Consumer Law Center.
Millions of borrowers are expected to benefit from a one-time IDR account adjustment that counts past payments toward the 240 or 300 needed for income-driven repayment forgiveness.
The Education Department said it will notify waves of IDR account adjustment loan forgiveness recipients about every two months, until the temporary program wraps up in July 2024.
Starting in July 2024, the Federal Student Aid office also plans to allow more loan statuses, such as deferments and forbearances, to count toward income-driven repayment forgiveness.
Months spent in the pandemic student loan payment pause also count toward IDR forgiveness, even if borrowers made no payments.
Sources: Federal Student Aid, Portfolio by Repayment Plan Q4 2023; U.S. Department of Education, press release, Jan. 11, 2024.
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Eliza Haverstock is a lead writer on NerdWallet's student loan team covering loan repayment and alternatives to traditional four-year degrees. See full bio.
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