Student Loan Forgiveness 2026: PSLF, RAP, IBR, SAVE Changes

There is no broad, one-time student loan forgiveness in 2026. The Supreme Court struck down the $430 billion plan in June 2023, and the follow-up "Plan B" rules were withdrawn in December 2024. What still works are the programs written into law: Public Service Loan Forgiveness after 10 years of qualifying payments, forgiveness at the end of an income-driven plan, and discharges for disability, death and school misconduct. Through August 2026, the Education Department had cancelled $96.4 billion for 1,291,700 borrowers through PSLF and its related programs alone.

Status, October 20, 2026. Federal student loans changed a lot this year. The One Big Beautiful Bill Act (Public Law 119-21) created the Repayment Assistance Plan (RAP) from July 1, 2026, a court vacated the SAVE plan on March 10, 2026, and income-driven forgiveness became taxable again on January 1, 2026. This page reflects the rules on that date; several court cases are still open, and we update it when they change. New loans' rates are on our student loan interest rates page.

The Short Answer

Public service: PSLF cancels the rest of your Direct Loans after 120 qualifying monthly payments while working full time for a government or 501(c)(3) employer. It is tax-free.
Income-driven plans: IBR forgives the remaining balance after 20 or 25 years, the new RAP after 30 years (360 payments). Since January 1, 2026 that forgiveness counts as taxable income.
SAVE is over. About 7.5 million SAVE borrowers must choose another plan; those who don't are placed on a standard plan. SAVE forbearance months do not count toward forgiveness.
Loans made from July 1, 2026 can only be repaid on RAP or the new Tiered Standard plan.
Discharges for total and permanent disability or death remain, and stay tax-free permanently.
Applying is free. Anyone charging a fee to get your loans forgiven is a red flag, the FTC says.

Forgiveness Programs at a Glance

Program	Who it is for	When the balance is cancelled
Public Service Loan Forgiveness	Full-time government and nonprofit workers with Direct Loans	After 120 qualifying payments (10 years, need not be in a row)
Repayment Assistance Plan (RAP)	Any Direct Loan borrower except Parent PLUS; the only income-driven plan for loans made from July 1, 2026	After 360 qualifying payments (30 years)
Income-Based Repayment (IBR)	Borrowers with loans made before July 1, 2026	After 20 years (new borrowers since July 1, 2014) or 25 years
PAYE and ICR	Only borrowers already on them on July 1, 2024 who take no loan after July 1, 2026	20 years (PAYE) or 25 years (ICR); both close after June 30, 2028
Teacher Loan Forgiveness	Teachers at low-income schools	Up to $5,000, or $17,500 for highly qualified math, science and special education teachers, after 5 consecutive years
Total and permanent disability	Borrowers with an SSA or VA disability finding, or a medical certification	When approved; often automatic through SSA or VA data
Death discharge	The borrower, or the student on a Parent PLUS loan	On proof of death
Borrower defense, closed school, false certification	Borrowers misled by a school, whose school closed, or whose loan was falsely certified	When ED approves the claim

From 34 CFR 685 (as amended by the May 1, 2026 final rule) and Public Law 119-21. Federal loans only; private loans have none of these programs.

Public Service Loan Forgiveness

PSLF is the largest working forgiveness program; our PSLF guide covers it in full. You qualify if you work full time (an average of at least 30 hours a week) for a federal, state, local or Tribal government, including the military, a 501(c)(3) nonprofit, or another nonprofit that provides certain public services, and you make 120 qualifying monthly payments on Direct Loans. FFEL and Perkins loans count only after you consolidate them into a Direct Consolidation Loan. Qualifying payments are those under an income-driven plan, the 10-year standard plan, or on-time payments under RAP. Payments under ICR-type plans (ICR, PAYE and SAVE) count only through June 30, 2028.

The numbers. The Education Department's data file, cumulative to the end of August 2026, shows 1,291,700 borrowers with $96.4 billion discharged across PSLF ($44.0 billion for 560,500 borrowers), the Temporary Expanded PSLF ($0.3 billion) and the 2021-2022 Limited Waiver ($52.1 billion). Another 2,748,300 borrowers have certified eligible employment, owing $248.7 billion.

The employer rule that was struck down. In October 2025 the department issued a rule letting it disqualify employers with a "substantial illegal purpose," to take effect July 1, 2026. Two federal courts vacated it on June 30, 2026, and the department appealed in August. The current PSLF form has no employer attestation.

Months that do not count. Time in the SAVE litigation forbearance does not count toward PSLF. PSLF buyback lets you pay for certain months spent in deferment or forbearance so they count, but not months on RAP. You apply with the PSLF form through the PSLF Help Tool on StudentAid.gov, and the forgiven amount is excluded from federal income tax.

Forgiveness on Income-Driven Plans

Income-driven plans set your payment by income and cancel what is left at the end. Which plans you can use now depends on when your loans were made.

RAP, from July 1, 2026: a flat 1% to 10% of your total AGI, minus $50 a month per dependent, at least $10 a month. Interest your on-time payment doesn't cover is waived, and the department adds a small principal match. Forgiveness after 30 years. Our RAP guide and calculator works out your payment.
IBR, for loans made before July 1, 2026: 10% of income above 150% of the poverty line with forgiveness after 20 years if you first borrowed on or after July 1, 2014, otherwise 15% and 25 years. The law removed the old "partial financial hardship" test. RAP months do not count toward the IBR clock.
PAYE and ICR: closed to new enrollment and ending after June 30, 2028.

Forgiveness is being processed again, slowly. After pauses during the SAVE litigation, the department's status reports in a federal case (AFT v. Department of Education) show 3,400 income-driven discharges in December 2025 and 21,200 in March 2026 (10,500 IBR, 9,900 ICR, 800 PAYE). The department now checks eligibility every other month and gives borrowers two months to opt out. For borrowers who became eligible in 2025, it agreed to date the discharge to the eligibility date and not to issue a Form 1099-C.

What Happened to SAVE

June 24, 2024: a federal court in Missouri blocked SAVE forgiveness; in summer 2024 SAVE borrowers were moved into a 0% interest forbearance.
February 18, 2025: the Eighth Circuit ruled the whole SAVE rule had to be blocked.
August 1, 2025: interest began accruing again on loans in the SAVE forbearance.
December 9, 2025: the department and Missouri settled: no new SAVE enrollments, and all SAVE borrowers moved to legal plans.
March 10, 2026: the court vacated the SAVE rule, except the provision that credits certain deferment and forbearance months toward forgiveness.
March 27, 2026: the department told about 7.5 million SAVE borrowers to choose a new plan. Servicers began sending notices on July 1, 2026, each with at least 90 days to choose; the department told a court no one has to leave before September 29, 2026.

If you are still on SAVE: pick a plan before the deadline on your notice (our SAVE borrower guide compares the options). Borrowers who do nothing are placed on the Standard or Tiered Standard plan, not an income-driven plan. If you are aiming for PSLF or income-driven forgiveness, RAP or IBR keeps that path open; the months in the SAVE forbearance won't count, but PSLF buyback may recover some of them.

Is Forgiven Student Debt Taxable?

It depends on the program and the year:

PSLF: tax-free federally under a permanent rule, 26 U.S.C. 108(f)(1).
Income-driven forgiveness (IBR, PAYE, ICR, RAP): tax-free federally for discharges from 2021 through 2025 under the American Rescue Plan. That exclusion was not extended. For discharges on or after January 1, 2026 the cancelled amount is generally taxable income, and you may receive a Form 1099-C. The insolvency exclusion may still reduce the tax for borrowers whose debts exceed their assets.
Death and total and permanent disability discharges: tax-free permanently for discharges after December 31, 2025, under section 70119 of Public Law 119-21, as long as your Social Security number is on the return.

State tax rules differ. A hypothetical borrower who has $40,000 forgiven under IBR in 2027 and pays a 22% federal marginal rate would owe roughly $8,800 in extra federal tax on it (our arithmetic), which is worth planning for years ahead. Our 2026 tax brackets show the rates.

Discharges: Disability, Death, School Problems

Total and permanent disability: qualify through Social Security disability records, a VA finding that you can't work because of a service-connected disability, or certification by a doctor, nurse practitioner, physician assistant or licensed psychologist. The department discharges automatically when SSA or VA data match. The old 3-year income monitoring ended July 1, 2023.
Death: federal loans are discharged on proof of death, including a Parent PLUS loan when the student dies.
Borrower defense: for borrowers whose school misled them. Public Law 119-21 put the 2022 rules on hold for loans first made before July 1, 2035 and restored the earlier ones; the department said in March 2026 that it has resumed deciding claims under the 1994, 2016 and 2019 rules.
Closed school: if your school closed while you were enrolled or shortly after you left. The 2022 rule's automatic discharge one year after closure is suspended by the same law.
Bankruptcy: possible only if you show "undue hardship" in a separate court proceeding; the Justice Department still uses its 2022 attestation process to assess these cases.

Default and Collections

The department restarted collections on defaulted loans on May 5, 2025, then on January 16, 2026 announced a temporary delay of involuntary collections, including wage garnishment and Treasury offsets of tax refunds, while it puts the new repayment rules in place. It had not announced a restart as of October 20, 2026. Defaults have grown: its data center shows 7.55 million borrowers with $187.8 billion of Direct Loans in default on June 30, 2026, up from 3.7 million and $82.6 billion a year earlier.

Two ways out of default: rehabilitation (9 on-time payments within 10 months, at a payment based on your income) or consolidation (after 3 on-time payments, or by agreeing to repay on an income-driven plan). Until now you could rehabilitate a loan only once; from July 1, 2027 the law allows a second time. Getting out of default also restores access to the forgiveness programs above.

Forgiveness Scams

Everything on this page is free to apply for at StudentAid.gov or through your servicer. The FTC warns that "you don't have to pay for help managing your student loans," to "never pay an upfront fee," and to "never share your FSA ID." In April 2026 it stopped an operation that allegedly posed as the Education Department and collected at least $8.8 million in fees, and in July 2026 it won a permanent ban against another debt relief company. Our debt consolidation guide explains why private refinancing of federal loans gives up these programs.

Sources & Methodology

Public Law 119-21: sections 82001 (RAP, Tiered Standard plan, transition from ICR-type plans), 82003 (second rehabilitation), 82004 (PSLF and RAP), 85001 and 85002 (borrower defense and closed school), 70119 (tax on death and disability discharges).
Education Department final rule, May 1, 2026 (effective July 1, 2026): RAP, IBR, PAYE and ICR, PSLF qualifying payments and buyback.
Federal Student Aid, PSLF data: cumulative to August 2026.
Missouri v. Trump, E.D. Mo. No. 4:24-cv-00520, order of March 10, 2026: SAVE rule vacated.
PSLF employer rule, 90 FR 48966 (October 31, 2025), and the court orders vacating it (D. Mass. 1:25-cv-13242 and 13244; D.D.C. 1:25-cv-03860, June 30, 2026).
AFT v. Department of Education status report: monthly income-driven discharge counts.
Education Department, January 16, 2026: delay of involuntary collections.
34 CFR part 685: Teacher Loan Forgiveness (685.217), disability (685.213), death (685.212), rehabilitation and consolidation; 26 U.S.C. 108(f) for taxes.
FTC, April 2026: student loan relief enforcement.

Method notes. Every rule and number comes from the law, the department's regulations and releases, court records or the FTC; our research files list a quote for each. Where the regulation printed online still shows text the 2025 law suspended (borrower defense, closed school), we follow the law. The tax example is our arithmetic for a hypothetical borrower.

This article is general information, not legal, tax or financial advice. Your servicer and StudentAid.gov have your loan details. Facts checked on October 20, 2026.

FAQ

Is there student loan forgiveness in 2026?
Not a broad, one-time cancellation. Programs set by law still forgive loans: PSLF after 10 years of public service, income-driven plans after 20 to 30 years, Teacher Loan Forgiveness, and discharges for disability, death and school misconduct.

What happened to the SAVE plan?
A federal court vacated it on March 10, 2026, after the Education Department settled with Missouri. About 7.5 million SAVE borrowers must choose another plan within the 90-day window on their servicer notice; those who don't are moved to a standard plan.

Does PSLF still exist?
Yes. It still cancels the remaining balance after 120 qualifying payments while working full time for a government or 501(c)(3) employer, tax-free. A 2025 rule restricting eligible employers was vacated by two courts in June 2026 and is under appeal.

Is student loan forgiveness taxable in 2026?
PSLF is not. Income-driven forgiveness after December 31, 2025 generally is, because the 2021-2025 exclusion expired. Discharges for death or total and permanent disability are tax-free permanently.

What is the Repayment Assistance Plan?
The income-driven plan that started July 1, 2026: 1% to 10% of AGI minus $50 per dependent, at least $10 a month, with forgiveness after 30 years. It is the only income-driven option for loans made from July 1, 2026. See our RAP calculator.

Are wages being garnished for defaulted student loans?
The Education Department delayed involuntary collections, including wage garnishment and tax refund offsets, on January 16, 2026, and had not announced a restart as of October 20, 2026. Rehabilitation or consolidation gets a loan out of default.

Student Loan Forgiveness in 2026: Every Program That Still Works