Thousands of borrowers are expected to receive a discharge of their federal student loans during the month of May, said the Education Department in a court filing last week. The discharges were preliminarily approved for these borrowers in March under income-driven repayment plans. But some questions remain about the timing and scope of the student loan forgiveness.
The announcement, included in a court-ordered status report filed last Wednesday by the department and Secretary of Education Linda McMahon, represents the latest batch of approvals for student loan forgiveness under income-driven repayment plans. IDR plans allow borrowers to make payments based on their income, with any remaining balance eligible for a discharge at the end of the plan’s repayment term. Income-Contingent Repayment, or ICR, allows for student loan forgiveness after 25 years in repayment, while Pay As You Earn, or PAYE, has a 20-year term. Income-Based Repayment, another option, offers both a 20- and 25-year path to loan forgiveness depending on when the borrower first took out their federal student loans. Under an interim agreement in an ongoing lawsuit over the Education Department’s alleged IDR processing delays and temporary suspension of IDR student loan forgiveness last year, the department is required to file monthly status reports.
But while the department’s latest status report filing contains good news for thousands of borrowers who are waiting on student loan forgiveness, the department’s commentary on potential irregularities related to eligibility determinations for several hundred borrowers is raising some questions. Here’s where things stand.
5,000 Borrowers Eligible To Get Student Loans Discharged Under Income-Driven Repayment, Says Education Department
After the Trump administration temporarily shut down processing for income-driven repayment plans last year and paused all associated student loan forgiveness, the Education Department has been steadily processing discharges for qualifying borrowers. As part of an agreement to suspend litigation brought by the American Federation of Teachers over the prior discharge and processing pauses, the department has been filing regular updates in court detailing its progress.
According to these filings, the department is now running checks for student loan discharge eligibility under income-driven repayment plans approximately every two months. When a borrower is identified as eligible to have their student loans discharged, they usually receive student loan forgiveness within one to two months of the eligibility determination. In the most recent status report the department filed last week, officials identified approximately 5,300 borrowers who are set to get their student loans discharged during the month of May.
“In March 2026, ED checked for discharge-eligible borrowers using the National Student Loan Data Service,” said the department in its status report submitted to federal district court last Wednesday. “That check identified 3,600 IBR, 1,400 Original ICR, and 300 PAYE borrowers as discharge-eligible. The numbers are rounded to the nearest hundred.”
However, the department indicated that officials experienced problems and delays with this latest batch of student loan forgiveness approvals, leading to some data gaps and delays in implementing discharges.
“ED encountered delays while validating the data,” explained the department in its filing. “It was not able to send the final lists to loan servicers until mid-April. Because of the usual waiting period between borrower notifications and discharges, no discharges from the March 2026 batch were processed in April. Loan servicers should be able to process discharges starting in May.”
“System Error” Could Impact Discharges Of Student Loans For Hundreds Of Borrowers In PAYE Plan
But the Education Department flagged a potential problem in last week’s status report. The department had indicated that 300 borrowers in the PAYE plan were eligible to get their student loans discharged. But because of the PAYE plan’s eligibility criteria, these borrowers may not actually qualify for student loan forgiveness, suggested the department.
“PAYE borrowers ordinarily should not be eligible for IDR discharges because the PAYE plan is not supposed to cover pre-2007 loans, and provides a 20-year timeline to discharge for non-PSLF borrowers,” said the department. “However, a system error allowed borrowers with pre-2007 loans to enroll in PAYE.”
The PAYE plan offers student loan forgiveness to borrowers after 20 years in repayment. The program has enrollment rules, however, based on when a borrower first took out their student loans. To qualify for PAYE, borrowers must have had no outstanding federal student loan balance as of October 1, 2007, and they must have also had a new federal student loan disbursement on or after October 1, 2011. Because of these eligibility rules, the department is suggesting that no borrowers in PAYE should qualify to have their student loans discharged until at least October 2027 (20 years after the earliest borrower would have been eligible to enroll).
This is not the first batch of PAYE plan borrowers who have been approved for student loan forgiveness. In March, the Education Department discharged the federal student loans for 800 PAYE plan borrowers, according to the department’s April’s status report filing.
The department provided no information on what its intentions are regarding PAYE plan federal student loan discharges, including whether the system glitch is in the process of getting fixed. The department has not indicated whether the 300 most recent borrowers approved to have their student loans discharged under PAYE will actually receive loan forgiveness this month, or whether the 800 borrowers who already got a discharge in April will be somehow impacted. The department did state, however, that it would file a “superseding status report” with additional data later this week.
Other Issues Impacting Student Loans In PAYE Plan
The system issue impacting discharge eligibility for student loan borrowers enrolled in the PAYE plan isn’t the only problem affecting the program.
Last month, the Education Department released final regulations governing the repayment of federal student loans, which are set to go into effect this July. Buried in the new rules is a provision that appears to bar enrollment in the PAYE plan for any borrower who wasn’t already signed up for the program by July 1, 2024. This suggests that even though Congress kept PAYE intact until July 2028 under President Donald Trump’s “One Big, Beautiful Bill Act” passed by Republican lawmakers last year, the department may try to limit new enrollments in the PAYE plan going forward. This might hit SAVE plan borrowers particularly hard as the department takes steps to kick borrowers off SAVE later this summer, and it may impact the ability of borrowers to receive 20-year student loan forgiveness under PAYE before the program is discontinued in 2028.
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