Should You Switch from SAVE or PAYE to IBR for Forgiveness?

Borrowers in all income-driven plans—IBR, PAYE, and ICR—can now have their loans forgiven again under the court-supervised AFT v. Education Department agreement. But SAVE remains frozen.

That means if you’re in the SAVE plan and you’ve hit the forgiveness mark in 2025, you’ll need to move into IBR before the end of the year so your discharge counts as tax-free under the American Rescue Plan Act. PAYE and ICR borrowers don’t need to switch; their forgiveness is being processed automatically.

Related: IBR Loan Forgiveness

The Education Department has resumed processing loan cancellations across three income-driven plans—IBR, PAYE, and ICR—after reaching a court-supervised agreement with the American Federation of Teachers. Under that deal, discharges that had been paused earlier this year are moving forward again, and borrowers who qualify in 2025 are protected from federal taxes on the forgiven balance.

SAVE remains the exception. Because it’s still blocked by litigation, borrowers in SAVE must transfer into IBR, PAYE, or ICR to receive forgiveness.

Borrowers who’ve reached 20 or 25 years of qualifying payments—roughly 240 or 300 months—can now have their loans canceled regardless of which income-driven plan they’re in, as long as the plan is still active.

Learn More: Will I Owe Taxes on IBR Loan Forgiveness After 2025?

Switching to IBR doesn’t restart your forgiveness timeline. Your qualifying payments under SAVE, PAYE, or ICR continue to count toward your 20- or 25-year total.

Under the court-supervised AFT agreement, the Education Department must now credit all prior qualifying months across eligible income-driven plans. That means your forgiveness clock keeps running even if you switch plans while the Department updates its systems.

Borrowers who applied for IBR on or after July 4, 2025 also benefit from a new rule that removed the partial financial hardship test. If your earlier IBR application was denied because your income was “too high,” you can reapply now and be approved once processing systems are updated.

Your count only resets if you consolidate after switching, because a consolidation loan starts a new record. Even then, your old payment history is restored under the one-time IDR adjustment as long as you met the federal deadlines.

If your tracker still shows “null” or “0” counts, it’s likely a data-sync issue that should correct once the Department finishes rebuilding its systems.

Related: How to Fix Your IBR Payment Count

Switching to IBR might make sense for some borrowers — but not everyone. It depends on your plan, how close you are to forgiveness, and what you’re trying to secure.

Borrowers in PAYE or ICR don’t need to switch for forgiveness — those discharges are being processed automatically.

SAVE borrowers are in a different position. The plan is still blocked by litigation, which means no forgiveness is being processed. If you’re already eligible for discharge in 2025, moving into IBR (or PAYE/ICR) lets your forgiveness go through and locks in your 2025 effective date for tax purposes. If you’re not there yet, switching can still make sense — especially if you want to stay on a plan that’s open and stable heading into the 2028 phase-out.

Just be aware that IBR payments are higher. It uses 10–15% of discretionary income, compared with SAVE’s 5%, and interest begins accruing again. If that cost is a strain and you’re still several years away from forgiveness, it may make more sense to stay put in SAVE until the courts reopen the plan or until the new Repayment Assistance Plan (RAP) launches in 2026.

Related: What Happens to IBR and SAVE Borrowers When RAP Starts

Apply to change plans at StudentAid.gov/idr. This is still the fastest way to move from SAVE, PAYE, or ICR into IBR. You can also submit a paper form through your servicer’s portal or request one directly.

1. Complete the application. Choose Income-Based Repayment (IBR) and verify your income using the IRS Data Retrieval Tool or by uploading a recent tax return or pay stub. As of July 4, 2025, you no longer need to show a partial financial hardship to qualify for IBR. If you were denied before that date because your income was too high, you can reapply now.

2. Wait for processing. Reviews typically take two to eight weeks, though delays are common while the Department rebuilds IDR systems. During that time, your account may show “processing forbearance” or “IDR pending review.” These months still count toward forgiveness once your plan updates.

3. Confirm your new plan. You’ll get an email when IBR becomes active. Your new payment shows in your servicer portal the next billing cycle. Some systems list IBR simply as “IDR”—that’s normal while data syncs.

4. Save your records. Keep copies of your submission, confirmation email, and updated Aid Summary. They’re essential if you need to fix your payment count later.

If there’s no update after 60 days, contact your servicer. Still no progress? Open a case through the FSA Feedback Center and request review by the Ombudsman Group. The Department is now required under the AFT settlement to continue processing IDR applications and publish monthly updates, so follow-up requests should move faster than earlier this year.

If your switch to IBR is taking longer than expected, you’re not alone. The Education Department is still clearing a backlog of IDR applications, but under the AFT court agreement, it must keep processing those requests and publish monthly status reports showing progress.

While you wait, keep your account in good standing. Continue making payments under your current plan if you can. If you can’t—or if you’re not in an IDR plan—ask your servicer to place your loans in administrative processing forbearance so you don’t fall behind. Those months can still count toward forgiveness once your plan updates.

The backlog should shrink as the Department’s reporting and compliance requirements take effect, but follow-up is still key. Check your account regularly and save any communication showing when your application was submitted and reviewed.

Switching from SAVE, PAYE, or ICR to IBR doesn’t hurt your progress toward Public Service Loan Forgiveness (PSLF).

PSLF still requires three things:

1. Full-time work for a qualifying employer

2. Eligible Direct Loans

3. Payments made under a qualifying repayment plan

IBR meets that plan requirement, and your PSLF payment count continues as long as you remain in repayment.

If you consolidate before or after switching, your PSLF count may temporarily reset—but those months will be restored under the one-time IDR adjustment or through ongoing data reconciliation required under the AFT agreement.

You can continue enrolling in IBR until June 30, 2028. After that, the Department of Education will phase out current income-driven repayment plans and move new borrowers into the Repayment Assistance Plan (RAP).

If you’re already in IBR before that date, you can stay there until your forgiveness is complete. Your progress continues to count month-for-month—even after RAP becomes the default plan.

Borrowers who later move from IBR into RAP will keep their same qualifying payment count. RAP adds five more years to the forgiveness timeline but keeps credit earned under IBR, PAYE, or ICR.

The AFT agreement doesn’t change this transition timeline, but it does require the Department to keep publishing data on forgiveness processing and plan participation through 2028.

Related: IBR vs RAP: Which Student Loan Repayment Plan Is Better for You?