Trump’s Department of Education Freezes IBR Student Loan Forgiveness

For more than 18 years, the Department of Education’s Income-Based Repayment (IBR) plan quietly helped millions of borrowers qualify for student loan forgiveness. For borrowers who’ve made 300 monthly payments over about 25 years, the plan cancels their outstanding balances and considers their repayment obligation to be satisfied.

No, IBR wasn’t perfect. But for many, IBR was a lifeline because it delivered lower monthly payments and a clear path to debt cancellation.

Then, in July 2025, that lifeline snapped.

On July 24, the Trump Administration announced it had paused all student loan forgiveness discharges for IBR borrowers. The Department’s official explanation—ostensibly citing delays in software updates required by a court order—immediately raised eyebrows. That’s because ED has four active income-driven repayment plans, and IBR is the only one not blocked by litigation or a nationwide injunction.

Yet sworn testimony from a recently departed Department official suggests the real reason for the freeze was not a technical bottleneck but a policy decision made at the highest levels. As we’ll see, decisions like that one now threaten to dismantle forgiveness for tens of thousands of borrowers who’ve played by the rules for 25 years.

The Education Department’s explanation for halting forgiveness under the Income-Based Repayment plan arrived not in a press release or formal statement, but in a quiet update to a single FAQ answer on the Federal Student Aid website. The agency claimed that forgiveness was paused “while our systems are updated to accurately count months not affected by the court’s injunction.” No date was provided for when forgiveness processing would resume.

In a closely related issue, the Department had also stopped tracking payment count progress toward student loan forgiveness for borrowers enrolled in the Public Service Loan Forgiveness (PSLF) program and any of the four Income-Driven Repayment programs—including IBR. Borrower dashboards on the StudentAid.gov website no longer displayed the payment counts that allowed borrowers to monitor their progress. This was a popular new feature launched by the Biden Administration in January 2025, and before it went live, borrowers had no easy way to verify their progress toward forgiveness.

In their press outreach, Department spokespeople doubled down on their attributions about delays. They insisted the pause was technical and “temporary.” They also claimed the pause had been prompted by the need to revise eligibility software in light of the recent nationwide injunction against the Biden Administration’s SAVE Plan, another income-driven repayment plan that still has eight million enrolled borrowers. Deputy Press Secretary Ellen Keast told the Washington Post that borrowers who had made excess payments past their student loan forgiveness eligibility dates would receive refunds once the system update was complete.

But borrower advocates and legal experts aren’t buying it.

“This is the Trump Administration deciding that its judgment is more important than the judgment of Congress, and it’s going to do whatever the hell it wants,” said Mike Pierce, executive director of the Student Borrower Protection Center, in an interview with ABC News. “As of today, if you have been in debt for 25 years, you have a right under federal law to get your debt canceled, and the government is not honoring that law.

“People with student loans do still have rights under the law, including the right to get their debt canceled,” Pierce told the network. “It’s important for borrowers to understand that the Trump Administration can’t wish that away.”

Abby Shafroth, the advocacy director at the National Consumer Law Center, called the move “surprising and concerning.” She pointed out that the IBR plan is not only clearly authorized by Congress, but was also the very program the Department had encouraged borrowers to switch into during the earlier phases of student loan reform. “It has sort of quietly come out that [IBR is] still not giving people cancellation,” Shafroth said. “It’s a mess.”

That quiet rollout—the stealth website edit, the vague timeline, the lack of transparency—has only fueled skepticism about whether this action resulted from a software glitch or a deliberate shift in policy. And as we’ll see in the upcoming sections, a recently filed declaration from one former Education Department official suggests that this “pause” has less to do with coding and more to do with capacity. The March 2025 firing of 1,400 ED employees left the Department incapable of quickly repairing the systems needed to process student loan forgiveness.

The clearest evidence that the forgiveness pause may not be technical at all comes not from policymakers or politicians, but from inside the Department itself.

In a sworn declaration filed in federal court, former Department of Education manager Alyssa Picard describes in detail how internal staffing cuts and restructuring left critical systems broken—and made forgiveness processing under the IBR program all but impossible. Because her testimony was submitted under penalty of perjury and pursuant to 28 U.S.C. § 1746, her evidence is highly credible. False statements in this type of federal declaration aren’t just unethical—they’re criminal. A knowingly false claim under this statute could lead to felony prosecution, prison time, and the permanent end to a federal service career. In short, Picard had every reason to tell the truth.

Picard’s job gave her a rare vantage point. From July 2023 through May 2025, she had worked at the Department’s Office of Federal Student Aid (FSA), where she started as a caseworker responding to borrower complaints in the Dispute Resolution Division (DRD). Picard was subsequently promoted to supervise a team of caseworkers, and she managed the group’s outreach to Congressional offices. In that role she also coordinated constituent casework forwarded from high-profile senators and representatives on Capitol Hill.

In other words, by 2025, Picard was a mid-level federal insider in charge of resolving high-priority issues that student borrowers had reported to their members of Congress; frequently ,these complaints focused on the Department’s loan processing subcontractors. But the failures she would soon witness would be systemic.

According to Picard, her work group was gutted during a sweeping staff reduction that unfolded early in 2025. In February, seven of her colleagues were abruptly dismissed. Then she says that on February 18 at an all-hands meeting, FSA’s principal deputy chief operating officer addressed this reduction in staffing, warning those present that FSA would be “not be doing more with less—we will be doing less with less.”

Three weeks later on March 11, entire divisions were slashed under Education Secretary Linda McMahon’s now infamous reduction-in-force (RIF) order that fired 50 percent of the Department of Education’s workforce. This RIF order wiped out entire FSA branches, including the Community Support Division, which had handled borrower disputes during outreach efforts. Picard says the departing employees were not allowed to transition their casework, and their assignments simply vanished. Within weeks, FSA’s capacity to respond to borrower complaints had collapsed.

The sworn declaration makes clear that the problems with IBR forgiveness and payment tracking weren’t accidental—they were the direct result of policy decisions to let critical support systems fall into disrepair. As Picard explains,

In the summer of 2024, FSA took over the administration of Public Service Loan Forgiveness (“PSLF”) from the Missouri Higher Education Loan Authority (“MOHELA”), which had previously been the primary loan servicer for PSLF applicants. Since then, the Dispute Resolution Division has received many borrower complaints about incorrect monthly payment counts and credits for PSLF eligibility.

According to FSA employees with whom I consulted, those problems were due to errors in the automation between the National Student Loan Data System and the Salesforce-based system that maintains PSLF employment certification information. Resolving those errors was the responsibility of a special team within FSA. After the mass RIF, the team that previously handled PSLF transfer issues was reassigned to do other work within FSA [and] no one was identified who could resolve complaints relating to errors in the PSLF payment count system. This persisted until the date of my separation from federal service.

In other words, the Department had “reassigned” all their employees with the expertise to fix errors in the payment count system—and the remaining employees couldn’t identify anyone else who wasn’t fired by the Department and who knew how to fix them.

Picard’s declaration then describes how her division once fielded both borrower complaints and relief work for 200,000 borrowers under the Sweet v. McMahon settlement—tasks requiring the same technical tools and staffing that processed IBR payment tallies. “However,” she recounts, “the mass RIFs hollowed out the intake team doing Sweet work.” Her declaration continues:

As of the first week of May 2025, dispute resolution casework responsibilities were also formally removed from supervisors’ performance metrics. As of the date I separated from the Department, one Dispute Resolution Division caseworker was working on disputes, and all other caseworkers had been shifted to Sweet work.

In other words, one single caseworker using defective software was now responsible for resolving the entire nation’s thousands of case disputes not covered by Sweet v. McMahon. This situation wasn’t driven by a sudden surge in Sweet cases (though Picard says roughly 12,800 had been filed by mid-May 2025, with only 27 percent resolved).

Instead, it came from the top. Picard notes that suggestions to reallocate resources or expedite software fixes were flatly rejected by the executive director of the Ombudsman’s Office, who admitted the new approach would be “more painful” and “slower” and “won’t work as well.” In other words, the Department chose policy expediency over satisfying its legal obligations.

By reassigning trained staff and stripping DRD of its performance incentives, the Department all but guaranteed that IBR payment counts would remain frozen. But the most alarming aspect that Picard testifies about relates to the Department’s apparent violations of at least three statutes as a matter of policy.

First, with “a total of 3,078 borrower dispute cases sitting in queues in the Ombudsman’s Office and not being worked on by any member of the staff,” she argues that the Department is willfully violating 20 U.S.C. § 1018(f)(1). That statute imposes a mandate on the Office “to provide timely assistance to borrowers of loans made, insured, or guaranteed under” Title IV of the Higher Education Act of 1965, as amended.

Second, she argues the Department is also violating a second statute, 20 U.S.C. § 1018(f)(3)(A). She says the Office hasn’t fulfilled and cannot fulfill its mandate under that statute to “receive, review, and attempt to resolve informally complaints from borrowers of [Title IV] loans . . . , including, as appropriate, attempt[s] to resolve such complaints within the Department of Education and with institutions of higher education, lenders, guaranty agencies, loan servicers, and other participants in” Title IV loan programs.

Finally, Picard levies her potentially most damaging charge against the Trump Administration. Her declaration appears to confirm that the Department has not and will not give eligible borrowers their student loan forgiveness discharges—a situation that fails to comply with the IBR program’s authorizing legislation passed by Congress. Furthermore, she testifies that this situation has been going on since July 2024, even though no court has barred student loan forgiveness through the IBR program.

Here’s that complete excerpt from her testimony:

Additionally, it is my understanding that as of April or early May 2025, federal student loan borrowers who are eligible for income-based repayment cancellation were still not having their loans cancelled—a process that has been paused since July 2024—despite the statutory obligation to do so.

Federal student loan borrowers who are enrolled in an income-based repayment plan are statutorily entitled to cancellation of the outstanding balance of their loans once they have made 20 or 25 years of payments on those loans, depending on when they took those loans out. See 20 U.S.C. § 1098e(b)(7) (stating that “the Secretary shall repay or cancel any outstanding balance of principal and interest due on” eligible loans for eligible borrowers (emphasis added)).

Without Dispute Resolution Division staff focused on dispute resolution cases, it is unclear who will resolve borrower complaints about these statutory failures on the part of FSA.