Income-Related Student Loan Forgiveness Continues
11,000 student loan borrowers got some very good news in the mail in February 2026. Borrowers who have made payments for twenty-five years are eligible for IDR (income-driven repayment) student loan forgiveness.
The Education Department stopped processing ICR discharges in early 2025 after a federal appeals court issued an injunction blocking the SAVE plan, a separate but related Biden-era IDR plan The department interpreted the court order as applying not only to the SAVE plan, but to ICR as well.
Last October, after this broad interpretation of the SAVE plan injunction was challenged in a separate lawsuit, the department agreed to resume ICR student loan forgiveness. However, technical delays continued.
In February 2026, the Education Department resumed ICR student loan forgiveness. “As previously discussed, ED runs discharge eligibility checks through the National Student Loan Data Service (NSLDS),” said the department in its court filing. “ED has upgraded NSLDS to check all three of the IBR, Original ICR, and PAYE plans. In January, ED identified 10,873 IBR borrowers, 10,729 Original ICR borrowers, and 820 PAYE borrowers as eligible for discharges.”
Student Loan Forgiveness in Bankruptcy
Borrowers who don’t want to wait a quarter century for student loan forgiveness based solely on the amount paid can partner with a Chicago bankruptcy lawyer and obtain immediate student loan forgiveness in Chapter 7 bankruptcy.
No waiting period applies in bankruptcy. Technically, student loan debtors can graduate on Friday and file voluntary petitions on Saturday. Additionally, the federal government has relaxed the student loan discharge rules, making it easier to obtain student loan forgiveness. More on that below.
Student loans are priority unsecured debts in bankruptcy. So, a Chicago bankruptcy lawyer must file a separate motion to discharge them. That extra step is very good news for debtors. Most judges refer these matters to mediation. During mediation, both sides must negotiate in good faith and make a deal if possible. “Sorry you don’t qualify” is not a good-faith negotiation position.
Additionally, income-related discharge often punishes people who scrimp and save in order to pay their student loans. The government concludes that if debtors sacrifice to make some payments, they may continue to do so.
Bankruptcy discharge takes other factors into account, such as the amount paid, the adverse effects loan payments have on lifestyle, and the hardship to dependents.
Repayment in Bankruptcy
Student loan repayment in a Chapter 13 bankruptcy is also available. Chapter 13 is ideal for debtors who fall behind on payments.
This form of bankruptcy includes a protected repayment period that lasts up to five years. The department of Education or another lender or servicing company cannot harass borrowers during this period. Technically, creditors cannot even contact debtors during the protected repayment period.
Chapter 13 bankruptcy also gives a lawyer a golden opportunity to renegotiate payment terms, such as the interest rate, and other loan provisions, such as the unpaid principal balance. The DOE knows that if it doesn’t make a favorable deal, the debtor could convert to Chapter 7 and discharge the obligation altogether.
In other words, during such negotiations, a Chicago bankruptcy lawyer is in the driver’s seat. That’s a very good place to be.
Count on a Thorough Cook County Lawyer
No matter what kind of financial problem you have, there’s a way out. For a free consultation with an experienced bankruptcy attorney in Chicago, contact the Bentz Holguin Law Firm, LLC. Convenient payment plans are available.
Source:
forbes.com/sites/adamminsky/2026/02/16/student-loan-forgiveness-surges-under-key-programs-as-11000-borrowers-get-delayed-relief/
