Student loan borrowers unaware of income-based plans, forgiveness options

With many federal student loan borrowers struggling to repay their debt, consumer advocates and financial advisors say it’s crucial that consumers know about the U.S. Department of Education’s affordable repayment plans and forgiveness programs.

Unfortunately, some don’t.

“Many borrowers end up paying more than necessary simply because they aren’t aware of the full range of relief options available to them,” said certified financial planner K.C. Smith, managing associate at Henssler Financial in Kennesaw, Georgia, which ranked No. 46 on CNBC’s Financial Advisor 100 list for 2025.

Indeed, 15% of federal student loan borrowers said they have heard “nothing at all” about the government’s income-based repayment plans, according to a new survey by The Institute for College Access & Success, a nonprofit that advocates for college affordability. Nearly a quarter of borrowers, or 23%, said they didn’t know about the Public Service Loan Forgiveness program, and 47% of borrowers were not aware of a program that cancels loans for certain disabled borrowers.

The survey, conducted in September, is based on responses from more than 1,000 self-identified federal student loan borrowers.

It is concerning how many student loan borrowers are in the dark about programs that can help them stay current and eliminate their debt sooner, said Michele Zampini, associate vice president of federal policy and advocacy at The Institute for College Access & Success, or TICAS. 

“Enrolling in an income-based repayment plan that lowers their monthly payment is often the only way a borrower can afford to stay out of default,” Zampini said.

Many borrowers would likely benefit from the option, which can drop payments as low as $0. More than 5 million borrowers are currently in default, and that total could swell to roughly 10 million borrowers soon, the Tump administration said earlier this year.

Borrowers are reeling from a weakening labor market, as well as a barrage of changes to the student loan system and recent trouble accessing programs under the Trump administration, experts say.

Still, key relief options are available. Here’s what borrowers need to know about them.

Congress created the first income-driven repayment plans, or IDRs, in the 1990s to make student loan borrowers’ bills more affordable. The plans cap monthly payments at a share of a borrower’s discretionary income and cancel any remaining debt after a certain period, typically 20 years or 25 years. Under the plans, some people end up with a zero-dollar monthly payment.

“For those with federal student loans, evaluating whether they qualify for an income-driven repayment plan can be an important way to improve cash flow,” Smith said.

The Biden administration’s Saving on a Valuable Education, or SAVE, plan is now defunct, after a court blocked the program. And President Donald Trump’s “big beautiful bill” phases out some other IDR plans. But borrowers will retain access to at least one plan, if not more.

The best option for many borrowers looking for another affordable repayment option now that SAVE is unavailable is the Income-Based Repayment plan, or IBR, experts said. Under the terms of IBR, borrowers pay 10% of their discretionary income each month — though that share rises to 15% for certain borrowers with older loans.

Current borrowers will maintain access to IBR. But those who borrow after July 1, 2026, will be able to enroll in only one IDR plan, known as the Repayment Assistance Plan, or RAP.

Under RAP, monthly payments will typically range from 1% to 10% of your earnings. The more you earn, the bigger your required payment. Bills can be as low as $10 a month on RAP.

You can submit a request for an IDR plan at StudentAid.gov.

Despite recent changes, the Education Department continues to offer a wide range of student loan forgiveness programs, including Public Service Loan Forgiveness and Teacher Loan Forgiveness.

PSLF allows certain not-for-profit and government employees to have their federal student loans cleared after 10 years of on-time payments.

Under TLF, those who teach full-time for five consecutive academic years in a low-income school or educational service agency can be eligible for loan forgiveness of up to $17,500.

Borrowers may also be eligible for loan forgiveness if their school suddenly closed or they’re diagnosed with a serious disability, Smith said.

At Studentaid.gov, borrowers can search for more federal debt cancellation opportunities. Meanwhile, The Institute of Student Loan Advisors has a database of student loan forgiveness programs by state.

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