logo
Brief Publisher Logo
FACT BRIEF

Are federal student loan balances eventually forgiven under income-dependent repayment plans?

By Jacob Alabab-Moser
View this fact brief on Wisconsin Watch
Copy link
email
Copy featured image
email
YES

Some, but not all, federal student loans are paid off under income-dependent repayment plans, whereby an individual's income determines the amount of their monthly payments. Any remaining balance for such loans is forgiven at the end of the repayment period, which is either 10, 20 or 25 years, depending on plan type. The borrower must remain in good standing throughout the repayment period.

Any forgiven loan balance will not be federally taxable income through 2025 because of the American Rescue Plan.

In July 2023, the Department of Education began notifying over 800,000 borrowers that their loans have been forgiven. Those borrowers have already made repayments for the full period specified by their loan terms, but those repayments were not accounted for accurately as a result of "historical failures in the administration" of the loan program.

Over 12,000 of the eligible borrowers are Wisconsin residents, totaling $576 million in relief.

This fact brief is responsive to conversations such as this one.
Sources
Federal Student Aid Federal student aid
Federal Student Aid Payment Count Adjustments Toward Income-Driven Repayment and Public Service Loan Forgiveness Programs
CNBC Here's how Biden's $39 billion in student loan forgiveness may impact your taxes
White House President Biden announces student loan relief for borrowers who need it most
US Department of Education Biden-Harris administration releases state-by-state data on $39 billion in loan forgiveness for 804,000 borrowers as a result of fixes to income-driven repayment plans
ABOUT THE CONTRIBUTOR
Wisconsin Watch
Wisconsin Watch, the news arm of the nonpartisan, nonprofit Wisconsin Center for Investigative Journalism, increases the quality and quantity of investigative reporting in Wisconsin, while training current and future investigative journalists. Its work fosters an informed citizenry and strengthens democracy.
FACT BRIEF BY
Brief Publisher Logo
Latest fact briefs from Wisconsin Watch
facebook
twitter
email
email
About fact briefs published on Gigafact
Fact briefs are short, credibly sourced summaries that offer “yes/no” answers in response to claims found online. They rely on publicly available, often primary source data and documents. Fact briefs are created by contributors to Gigafact —a nonprofit project looking to expand participation in fact-checking and protect the democratic process. See all fact briefs here.