The Trump administration has agreed to cancel student debt under programs it had partially blocked, reopening a path to student loan forgiveness for millions of borrowers.
The outcome is the result of an agreement reached on Friday between the U.S. Department of Education and the American Federation of Teachers, a union.
In the agreement, the Trump administration said it will again process student loan forgiveness for eligible borrowers in two income-driven repayment plans — the original Income-Contingent Repayment plan and the Pay as You Earn plan — as long as those programs remain in effect.
President Donald Trump’s “big beautiful bill” will phase out ICR and PAYE as of July 1, 2028.
“This is a tremendous win for borrowers,” said Winston Berkman-Breen, the legal director for Protect Borrowers, which served as the AFT’s counsel. “The U.S. Department of Education has agreed to follow the law and deliver Congressionally mandated affordable payments and debt relief to hard-working public service workers across the country.”
