The SAVE Plan is over. After a December 2025 settlement with Missouri, the Department of Education stopped enrolling borrowers in SAVE, and the plan ended July 1, 2026. SAVE borrowers had 90 days to pick a new plan or be moved to a standard plan; interest on SAVE loans resumed August 1, 2025. The new Repayment Assistance Plan (RAP) opened July 1, 2026. Borrowers with loans made on or after that date can choose only RAP or the Tiered Standard plan, and PAYE and ICR close to everyone on July 1, 2028.
Source: U.S. Department of Education, Dec. 9, 2025; Department of Education fact sheet on RAP; NYC Department of Consumer and Worker Protection — Key changes, July 2026
The main active student loan forgiveness programs in 2026 are: PSLF (10 years of public service payments), Teacher Loan Forgiveness (5 years of teaching), IDR forgiveness (20–25 years on IBR, or 30 years on the new RAP), Total and Permanent Disability Discharge, and Borrower Defense to Repayment. Private loans do not qualify for federal forgiveness.
Student Loan Forgiveness 2026 Program 1: Public Service Loan Forgiveness (PSLF)
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Source: Federal Student Aid — Public Service Loan Forgiveness; FSA Data Center.
Program 2: Income-Driven Repayment (IDR) Forgiveness
| Plan | Payment Cap | Forgiveness After | Available In 2026? |
|---|---|---|---|
| IBR (new borrowers) | 10% of discretionary income | 20 years | ✅ Yes |
| IBR (older borrowers) | 15% of discretionary income | 25 years | ✅ Yes |
| PAYE | 10% of discretionary income | 20 years | ✅ Yes, until July 1, 2028 (existing borrowers) |
| ICR | 20% of discretionary income | 25 years | ✅ Yes, until July 1, 2028 (existing borrowers) |
| RAP (new) | 1%–10% of income, minus $50 per dependent; $10 minimum | 30 years (360 qualifying payments) | ✅ Yes, since July 1, 2026 |
| SAVE | 5–10% of discretionary income | 10–20 years | ❌ No — ended July 1, 2026 |
Source: Federal Student Aid — Income-Driven Repayment; Department of Education RAP fact sheet; NYC DCWP — Key changes, July 2026.
Program 3: Teacher Loan Forgiveness
- Amount: Up to $17,500 (math/science/special ed teachers) or $5,000 (other subjects)
- Requirement: 5 consecutive years teaching full-time in a low-income school
- Loan type: Direct Subsidized/Unsubsidized Loans, Subsidized/Unsubsidized Stafford Loans
- How to apply: Complete Teacher Loan Forgiveness Application after 5th year via studentaid.gov
Program 4: Total and Permanent Disability (TPD) Discharge
Borrowers who are totally and permanently disabled may have 100% of their federal student loans discharged. Documentation can come from the VA, SSA, or a physician. As of 2024, the Department of Education automatically identifies eligible borrowers through SSA data matching. Source: Federal Student Aid, TPD Discharge Program.
Program 5: Borrower Defense to Repayment
If your school misled you or violated state law related to your loan or education, you may qualify for a discharge. This primarily applies to borrowers who attended schools that closed or were found to have committed fraud (e.g., certain for-profit institutions). Apply at studentaid.gov/borrower-defense.
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Frequently Asked Questions
Is student loan forgiveness taxable?
PSLF forgiveness is permanently tax-free under federal law. The American Rescue Plan Act made most student loan forgiveness federally tax-free for discharges from 2021 through 2025. That temporary exclusion has expired, so IDR forgiveness granted in 2026 or later may be taxable unless Congress acts. Check IRS guidance or a tax professional before you count on a tax-free discharge.
Do private student loans qualify for forgiveness?
No. Federal forgiveness programs only apply to federal student loans held by the U.S. Department of Education. Private loans (from banks, credit unions, or private lenders) do not qualify for any federal forgiveness program. For private loans, refinancing to a lower rate is typically the best option.
What happened to the SAVE Plan?
SAVE was introduced in 2023 and blocked by federal courts. Interest on SAVE loans resumed August 1, 2025, and under a December 2025 settlement the Department of Education ended the plan on July 1, 2026. Former SAVE borrowers had 90 days to choose IBR, RAP or another plan; those who didn’t were placed in a standard plan. Check your servicer account on studentaid.gov to confirm your current plan.