Core Points - The Trump administration has reached an agreement with the American Federation of Teachers (AFT) to provide student loan relief for millions of borrowers [1] - The agreement allows the Department of Education to resume processing forgiveness for borrowers in Income-Contingent Repayment (IDR), Pay As You Earn (PAYE), and Public Service Loan Forgiveness (PSLF) programs, particularly benefiting those who have been repaying for over 20 years [2] - The programs will remain active until 2028, after which they are expected to be phased out under the One Big Beautiful Bill Act [2] - A tax break is included in the deal, where borrowers qualifying for forgiveness this year will not owe taxes on canceled debt until 2026, after which forgiven balances will be taxable [3] - The agreement is seen as a significant victory for borrowers, as stated by legal experts [3] Borrower Impact - Approximately 2.5 million borrowers currently enrolled in ICR or PAYE may finally see debt forgiveness materialize due to this new agreement [4] - The AFT previously sued the Trump administration for blocking access to repayment and forgiveness programs, which left nearly 2 million borrowers in limbo [5] - The Department of Education had previously approved over $180 billion in student debt cancellation for more than 4 million borrowers under the Biden administration [6]

Core Points - The Trump administration has reached an agreement with the American Federation of Teachers (AFT) to provide student loan relief for millions of borrowers [1] - The agreement allows the Department of Education to resume processing forgiveness for borrowers in Income-Contingent Repayment (IDR), Pay As You Earn (PAYE), and Public Service Loan Forgiveness (PSLF) programs, particularly benefiting those who have been repaying for over 20 years [2] - The programs will remain active until 2028, after which they are expected to be phased out under President Trump's proposed legislation [2] Summary by Sections - **Loan Forgiveness and Tax Implications** - Borrowers qualifying for forgiveness this year will not owe taxes on canceled debt, even if forgiveness is not effective until 2026; post-2026, forgiven amounts will be taxable [3] - **Impact on Borrowers** - The agreement is seen as a significant victory for borrowers, with approximately 2.5 million currently enrolled in ICR or PAYE potentially benefiting from actual debt forgiveness [4] - **Legal Context and Previous Administration Actions** - The AFT previously sued the Trump administration for blocking access to repayment and forgiveness programs, which left nearly 2 million borrowers in ICR plans without resolution [5] - The Biden administration had previously approved over $180 billion in student debt cancellation for more than 4 million borrowers, including around 1 million public service workers through the PSLF program [6]