The Trump administration has resumed processing student loan forgiveness for eligible borrowers through two income-driven repayment plans, according to multiple reports. The decision follows an agreement between the U.S. Department of Education and the American Federation of Teachers (AFT), which had previously challenged policies that blocked relief programs.

Under the new arrangement, borrowers enrolled in the Income-Contingent Repayment and Pay as You Earn plans will qualify for debt cancellation once they meet eligibility requirements. These programs, set to expire on July 1, 2028, currently serve over 2.5 million participants, per a higher education expert’s estimate.

The AFT filed a lawsuit against the administration in March, alleging that officials had blocked access to repayment plans mandated by borrowers’ original terms. The Trump-era Education Department had paused some forgiveness options earlier this year, citing court orders related to the Biden administration’s SAVE plan. However, consumer advocates argued this approach unfairly limited borrowers’ choices, leaving only the Income-Based Repayment (IBR) plan as a viable path for cancellation.

The agreement ensures that borrowers receiving relief in 2023 will not face federal taxes on forgiven debt. The AFT praised the decision, calling it a “tremendous win” for public service workers. Legal representatives for the teachers’ union emphasized that the Education Department would now comply with congressional mandates to provide affordable payments and debt relief under court supervision.