Student Loan Forgiveness After 25 Years: How It Works

• Federal student loans can be forgiven after 25 years of payments under an income-driven repayment plan.

• Most federal student loan borrowers are eligible for 25 year loan forgiveness, regardless of their career, provided they meet the plan’s requirements.

• Few borrowers historically received forgiveness, but the federal government has expanded access through a temporary waiver and one-time payment adjustment.

If you’ve been paying your federal loans for decades, you might be closer to student loan forgiveness after 25 years than you think. Forgiveness isn’t automatic, though—you need to make income-based payments during that time.

Typically, months spent in deferment, grace periods, or forbearance don’t count toward those 25 years. But a temporary program introduced during the pandemic—sometimes called the IDR Waiver or payment count adjustment—may have given you extra credit toward forgiveness for some of that time.

Here’s what you need to know about the 25-year forgiveness rule, what qualifies, and what happens if you have private loans.

Related: When Do Student Loans Go Away?

The 25-year rule means the Department of Education will forgive whatever’s left of your federal student loans after you’ve made 300 monthly payments under one of its income-driven repayment plans.

There are four IDR plans:

• Saving on a Valuable Education (SAVE)

• Pay As You Earn (PAYE)

• Income-Based Repayment (IBR)

• Income-Contingent Repayment (ICR)

Each plan sets your payment based on your income and family size. Here’s how it works: every 12 months, you’ll recertify your income and family size, and they’ll recalculate your payment. Then you rinse and repeat—for 25 years.

But not every IDR plan requires 25 years to forgiveness. For example, under the PAYE plan, you could qualify for student loan forgiveness after 20 years if you borrowed for both undergraduate and graduate programs.

When I explain this to clients, the first question I hear is about interest. They picture the interest piling up, the loan balance growing, and the monster they’ve been battling for years getting even bigger.

And yes, the interest will grow. That’s because your payment probably isn’t enough to cover the full interest—if it were, you wouldn’t be on an IDR plan.

But here’s the thing: you don’t need to worry about the interest. Instead, think of that growing balance like a monster in a closet. Every year, we’ll open the door, throw in some IDR paperwork, and shut it again. Sure, the monster will get bigger, but we’re not feeding it—we’re just keeping it contained.

Then, one day, you’ll open the closet, and the monster will be gone. That’s the day the government forgives your loan.

If you don’t pay off your student loans in 25 years, you still owe the balance—period. You’ll keep paying until you either pay it off in full or qualify for forgiveness under an income-driven repayment plan.
But forgiveness after 25 years isn’t automatic. Here’s why borrowers still owe after all this time:

• Not enrolled in an IDR plan. Only payments made under IDR plans count toward the 25-year rule. Time in other plans, like standard or graduated repayment, doesn’t qualify.

• Time in deferment or forbearance. Months in deferment (except during certain economic hardships) or forbearance don’t count. For some borrowers, this added years to their timeline.

• Default or bankruptcy. These stop the forgiveness clock entirely. Even if you rehabilitate or consolidate, you lose credit for time spent in default or bankruptcy.

• Incomplete payment history. Errors or missing records mean some borrowers’ qualifying time hasn’t been counted accurately.

If you’ve had loans for decades but haven’t seen forgiveness, this is likely why. Understanding where you stand now can help you figure out your next steps—and whether recent changes, like the one-time account adjustment (more on that later) might help.

Only federal loans are eligible for 25-year forgiveness, and borrowers must be enrolled in an IDR plan to qualify. Direct Loans, including Direct Consolidation Loans, are eligible automatically. Older loans, like Federal Family Education Loans, Perkins Loans, and Parent PLUS Loans must be consolidated into a Direct Loan to become eligible.

Not sure what type of loan you have? Log in to your Federal Student Aid account to check. Consolidation combines older loans into a new Direct Loan, and only payments made after consolidation count toward forgiveness.

Good news: you don’t need to apply for 25-year student loan forgiveness. There’s no special form or application to fill out.

Instead, your loan servicer and the Department of Education will track your qualifying payments under your IDR plan. You can check your progress anytime using the IDR Tracker on your Federal Student Aid account.

Once you hit 300 monthly payments, the Department of Education will notify your servicer that it’s time to forgive your remaining balance. Your servicer will then handle the rest—clearing your balance, updating your credit report, and closing out your loans.

Student loans do get forgiven after 25 years, but until recently, almost no one saw that benefit. Before recent reforms, IDR forgiveness (sometimes referred to as IBR Loan Forgiveness) was practically out of reach—just 50 borrowers had their loans forgiven since the first IDR plan, ICR, launched in 1994.

Why? Strict rules, servicer mistakes, and gaps in payment histories meant most borrowers couldn’t meet the requirements. If you weren’t enrolled in an IDR plan, had deferments or forbearance, or defaulted on your loans, you were out of luck.

The one-time account adjustment fixes many of these issues. It gives borrowers credit for periods that previously didn’t count, like:

• Certain deferments (excluding in-school deferment).

• Forbearance of 12 consecutive months or 36 cumulative months.

• The 3 years of paused payments during the pandemic.

If you’ve been in repayment for decades, this adjustment could bring you closer to forgiveness—or even push you past the 25-year mark. Best of all, it’s automatic. The Department of Education reviews your loans, applies the adjustment, and notifies your servicer to clear your balance if you qualify.

For weeks, partisan politics blocked access to income-driven repayment plans, leaving borrowers in limbo. And with the Trump administration preparing to take office, many are left wondering what’s next for student loan forgiveness.

The good news is that IDR applications have reopened. You can apply online through the Federal Student Aid website or by contacting your loan servicer. Choosing the right plan is critical—especially with the SAVE plan’s future uncertain.

For most borrowers working toward forgiveness, the IBR or PAYE plans are the safest choices. If you’re a parent with Parent PLUS loans, the ICR plan makes the most sense—unless you’re pursuing the double consolidation loophole. Doing that will give you access to the other IDR plans.

If you’re not sure which plan is right for you or how to get started, check out our guide to student loan repayment plans. It breaks down who to talk to, what questions to ask, and how to make the best decision for your situation.

Remember the growing interest we talked about earlier—the “monster in the closet”? When the government forgives your loans, you might think you’ll finally close that door for good. But there’s one last thing to check: taxes.

Right now, forgiven student loans aren’t considered taxable income, thanks to the American Rescue Plan Act, which provides temporary tax relief for loans forgiven between 2020 and 2025. This includes loans forgiven under IDR plans. But if your loans are forgiven after 2025, you may need to plan for a tax bill unless Congress extends or makes this relief permanent.

Typically, forgiven debt is treated as taxable income, meaning you’ll need to report it when you file your taxes. Borrowers expecting forgiveness after 2025 should start preparing now, just in case the relief expires.

If waiting decades for forgiveness feels impossible, here are some alternatives that might help you get relief sooner:

• Public Service Loan Forgiveness (PSLF): The PSLF program forgives your remaining student loan debt after 10 years (120 qualifying payments) if you work full-time for a government or nonprofit organization.

• Borrower Defense to Repayment: If your school misled you or violated laws, you could qualify for federal student loan forgiveness through this program.

• Disability Discharge (TPD): For borrowers unable to work due to a disability, this program provides full forgiveness of federal loans, regardless of the repayment period.

• State-Based Forgiveness Programs: Some states offer forgiveness for professionals like teachers, healthcare workers, and attorneys. Eligibility requirements vary by state and profession.

Another option some borrowers consider is refinancing their loans with a private lender. Be careful though. Refinancing might lower your student loan payments with a lower interest rate. But eliminates access to federal protections like forgiveness programs and income-driven repayment.

For borrowers who’ve already had their loans for years, refinancing could also mean paying more interest over time. For most eligible borrowers, staying in a federal program is often the better path to having their balance forgiven.

Private student loans aren’t typically forgiven after 25 years—or ever. But in rare cases, forgiveness is possible. For example, Navient Private Loan Forgiveness is available for borrowers whose schools engaged in misconduct, offering relief under very specific circumstances.

For most borrowers, managing or resolving their student debt will require other repayment options.

Refinancing can help lower your interest rate or monthly payments if your financial situation allows you to qualify.

If refinancing isn’t an option, you might consider negotiating a settlement to pay less than what you owe or, as a last resort, filing for bankruptcy. Outcomes for settlement or bankruptcy often depend on the borrower’s income and overall ability to repay.

Federal student loans can be forgiven after 25 years of payments under an income-driven repayment plan. Eligibility depends on your loan type and repayment history—some borrowers may need to consolidate into a Direct Loan before starting the forgiveness clock.

Forgiveness is within reach for nearly all federal borrowers, regardless of your career. But navigating repayment plans, tracking progress, and staying on the path to relief can be overwhelming.

Need help figuring out the best plan or how soon you could see your loans forgiven?

Book a call with one of our student loan experts. We’ll analyze your payment history, financial situation, and goals to build a strategy that works for you.