The landscape of federal student loan forgiveness has shifted significantly with the passage of the One Big Beautiful Bill Act (OBBBA) in 2025. For borrowers seeking forgiveness after 20 years, the path forward has become more complex, with new deadlines and program changes impacting eligibility.
Understanding Eligibility and Enrollment
Federal student loan forgiveness is not automatic. Borrowers must actively enroll in an eligible loan repayment program and meet specific criteria, including making the required on-time payments. Primarily, federally subsidized loans are eligible for forgiveness, while private loans are not. While some plans previously offered 20-year forgiveness, these are being phased out by 2028, with limited exceptions.
Changes to 20-Year Forgiveness Plans
For new borrowers on or after July 1, 2026, there are no plans offering student loan forgiveness after 20 years. The Public Service Loan Forgiveness (PSLF) program remains an option, forgiving loans after 10 years for those working in approved public service roles.
Previously, an Income-Based Repayment (IBR) plan, created in 2010, allowed for forgiveness after 20 years for borrowers who took out new loans after July 1, 2014. President Obama also established the Pay As You Earn (PAYE) plan in 2012, which also offered 20-year forgiveness with payments capped at 10% of annual income.
The Biden Administration's Saving on a Valuable Education (SAVE) plan, launched in 2023, aimed to reduce payments and shorten forgiveness timelines, but it faced legal challenges and was overturned.
The OBBBA, enacted in 2025, is sunsetting programs that offered 20-year forgiveness, replacing them by 2028 with the Repayment Assistance Plan (RAP) and the Tiered Standard Plan (TSP). RAP includes a forgiveness provision after 30 years of payments, while the TSP is not a loan forgiveness program.
Action Required for Existing Borrowers
Borrowers who took out student loans after July 1, 2026, are ineligible for 20-year repayment plans but can still enroll in the new RAP plan for 30-year forgiveness. Those already in the PAYE plan can remain until it sunsets on July 1, 2028. However, without proactive steps, loan providers may automatically enroll these borrowers into the Tiered Standard Plan, which does not offer forgiveness.
To retain eligibility for 20-year forgiveness, individuals in the PAYE plan must apply to switch to the Income-Based Repayment (IBR) plan by submitting a request through the Federal Student Aid portal before July 1, 2028. Existing PAYE enrollees who meet the criteria will automatically retain their 20-year forgiveness schedule under the new IBR rules.
Additionally, due to administrative changes related to the SAVE plan litigation, eligible legacy SAVE borrowers must first enroll in PAYE before July 1, 2027, and then transition to the new IBR plan before PAYE's 2028 sunset to maintain a 20-year repayment track.
The OBBBA has eliminated the 20-year income-based loan forgiveness window for new borrowers. For existing borrowers enrolled in a 20-year forgiveness program before July 1, 2026, the opportunity to maintain this benefit requires transferring to an IBR plan by July 1, 2028. Burgess Owens (R-Utah), Chairman of the Higher Education and Workforce Development Subcommittee, stated that the OBBBA aims to hold educational institutions accountable and reintroduce market incentives in higher education. Conversely, Victoria Jackson of The Education Trust described the act as a significant reduction in federal student aid and borrower protections.