Daniel Gray, a 56-year-old man from the United States, received an email on October 23 stating that the U.S. Department of Education would forgive his over $170,000 student loans. Gray was quoted saying, “It’s unbelievable, this is the first time since I was 18 years old that I am debt-free.”
However, this loan forgiveness was not unexpected. According to a report by CNBC on November 22, Gray had been repaying his student loans since the 1990s and was enrolled in an Income-Driven Repayment (IDR) plan, typically designed to forgive remaining loans after 20 or 25 years. Like many borrowers, Gray had been concerned that under the leadership of the Trump administration, obtaining this forgiveness would become increasingly difficult.
Higher education expert Mark Kantrowitz mentioned that many student loan borrowers have been skeptical recently about whether they would receive the loan forgiveness they are entitled to. He stated, “When borrowers worry about whether the Trump administration will violate the federal government’s promise of student loan forgiveness policies, it brings them significant economic and mental stress.”
The U.S. Department of Education did not respond to inquiries regarding the matter.
Earlier this year, the Department of Education temporarily halted the forgiveness programs for two long-standing repayment plans, the Income-Contingent Repayment (ICR) and Pay As You Earn (PAYE) plans. Additionally, debt forgiveness based on Income-Based Repayment (IBR) plans was also temporarily suspended.
Kantrowitz pointed out that currently, over 12 million borrowers are participating in the Department of Education’s IDR plan.
In October of this year, there was a turning point. Due to a lawsuit filed by the American Federation of Teachers (AFT), the Trump administration agreed to reinstate debt forgiveness for ICR and PAYE plans, and eligible IBR plan borrowers started receiving loan forgiveness again.
The AFT believed that the Trump administration was obstructing borrowers from exercising their rights as stipulated in the loan terms.
Weena Sanchez, a consultant from the New York non-profit organization Education Debt Consumer Assistance Program (EDCAP) who assisted Gray with his loan forgiveness application, mentioned that Gray had reached the IDR debt cancellation threshold as early as May this year. She added, “We can’t be 100% sure, but AFT’s lawsuit may have facilitated the debt forgiveness.”
She further noted, “We’ve heard that other clients have also received similar notifications.”
As the loan forgiveness programs continue to be reinstated, the Department of Education announced this week that it would transfer most student loan programs to other institutions. Experts believe this move is part of President Trump’s efforts to dismantle the Education Department. According to a report by Politico in October, the Education Department is exploring the possibility of selling a portion of the federal student loans, reaching up to $1.6 trillion, to the private market.
In conclusion, recent cases demonstrate that if borrowers meet the conditions of the IDR program, they can expect to receive debt forgiveness as scheduled.