Core Insights - The student loan landscape has faced significant turmoil over the past year, with legal challenges and a processing backlog affecting borrowers, culminating in a critical deadline of December 31, 2025, for those eligible for loan forgiveness [1] Group 1: SAVE Plan Developments - The Saving on a Valuable Education (SAVE) Plan, a Biden-era initiative linking debt repayments to borrower income, has been effectively terminated due to ongoing legal challenges, impacting seven million borrowers [2] - Borrowers enrolled in the SAVE program, as well as those who applied, must transition to alternative repayment plans due to the program's conclusion [2] - Current repayment options include Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), and Pay As You Earn (PAYE), with ICR and PAYE set to phase out by July 2028, aligning with the sunset of the SAVE program [3] Group 2: Tax Implications of Loan Forgiveness - Loan forgiveness under income-driven repayment (IDR) programs was exempt from taxation until the end of 2025, as per the American Rescue Plan Act of 2021, but this tax exemption will not be extended, leading to potential tax liabilities for borrowers starting January 1, 2026 [4] - A group of Democrat senators has urged the administration to utilize existing administrative authorities to mitigate the impending tax implications for working-class families facing the IDR "tax bomb" [5]