2:11In this Sept. 23, 2020, file photo, the Department of Education building is shown in Washington, D.C.Robert Knopes/UIG via Getty Images, FILE
The Department of Education has temporarily suspended discharges for Income Based Repayment (IBR) plan student loan borrowers to adhere to ongoing court injunctions.
The IBR plan fully forgives loan debt for borrowers who have made 300 monthly payments, which is approximately 25 years of payments. Following this 25-year duration, the plan eliminates any remaining balances and regards the borrowers’ repayment obligation as fulfilled.
The IBR plan is one of four Income Driven Repayment options that deduct a portion of your income for monthly payments, including Pay As You Earn (PAYE), Income Contingent Repayment, and the Savings on a Valuable Education or “SAVE” plans. Borrowers enrolled in the Biden-era SAVE plan — roughly 7.7 million individuals — will see interest charges reinstated on Aug. 1, coinciding with the Education Department’s announcement of compliance with the federal court injunction that halted the plan’s implementation.
The education department indicated that the SAVE Plan introduced forbearances, which either postpones or reduces payments, that would count towards discharge under the IBR repayment plan.
Student loan advocates express to ABC News that borrowers still being invoiced under IBR are now feeling disheartened that their student loans have not been discharged as promised under the plan.
"As of today, if you have been in debt for 25 years, you have a right under federal law to have your debt canceled, and the government is not upholding that law," stated Student Borrower Protection Center (SBPC) Executive Director Mike Pierce.
This plan was mandated by the Higher Education Act and was supported by the Trump administration’s Education Department while it rolls out its new Repayment Assistance Plan.
The temporary suspension, noted on a Frequently Asked Questions page of the Federal Student Aid website, is causing anxiety and uncertainty for borrowers who feel left uninformed, according to student loan experts.
Pierce remarked that the government halted the forgiveness plan for reasons that have not been clarified by the administration.
"We don't know how many individuals are impacted by it, we don't know how many will be affected in the future, we don't know the rationale behind it," Pierce told ABC News.
"We're concerned that this is simply the Trump administration deciding that its judgment holds more weight than that of Congress, and it's going to proceed with its own agenda regardless," Pierce added.
The Department of Education stated that the "Department has temporarily paused discharges for IBR borrowers to comply with ongoing court injunctions" regarding the Biden administration’s student loan forgiveness initiative.
"For any borrower who makes a payment after becoming eligible for forgiveness, the Department will refund overpayments once the discharges resume," said Department of Education Deputy Press Secretary Ellen Keast in a statement to ABC News.
The quad of the University of Illinois in Champaign.STOCK PHOTO/Getty Images
During the temporary discharge pause, IBR accounts are undergoing audits to verify the number of qualifying payments received.
Abby Shafroth, managing director of advocacy at the National Consumer Law Center (NCLC), described the pause as both unexpected and alarming for borrowers, as many have already met the required number of payments.
"It has sort of quietly emerged that [IBR is] still not granting people cancellation," Shafroth informed ABC News.
Shafroth characterized the situation as a "mess." She emphasized that the IBR plan is the one program that the current Education Department has advocated for borrowers to join, has promised debt forgiveness, and that Congress explicitly established and mandated.
Sourse: abcnews.go.com