A vacation might finally be on the horizon for Tammy Stinson.
That’s because after nearly 25 years of payments, Stinson’s $70,000 student-loan balance has finally been wiped out.
“I feel like I might be free now,” Stinson, 52, told Business Insider. “I can actually live my life and hopefully retire before I’m 90.”
Stinson’s student-loan forgiveness is a result of meeting her qualifying payments on an income-based repayment plan. IBR plans offer borrowers monthly payments based on their income, with forgiveness after 20 or 25 years, depending on when they first took out the loan.
President Donald Trump’s Department of Education paused IBR processing over the summer, citing ongoing litigation regarding repayment plans, which delayed relief for borrowers. In late September, however, borrowers who met the payment threshold began receiving emails from the department notifying them that they qualified for relief, and servicers began zeroing out borrowers’ balances in mid-October.
Stinson, who now works in consulting in Pennsylvania, said that after graduating with her bachelor’s degree in economics in 2001 from St. Ambrose University, she struggled to find a well-paying job while raising her children. Her income fluctuated, and while she made her student-loan payments, they largely went toward the accumulating interest on her balance. She postponed buying a house with her husband until two years ago because she did not want to take on more debt.
“Having kids when I was younger, and then finishing school, and then just starting out feeling like I was so in debt, I just felt like it was hopeless at some points,” Stinson said.
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Not only is the loan forgiveness long-awaited for Stinson — it came at a critical time. A 2021 provision of the American Rescue Plan that made student-debt relief tax-free is set to expire in January 2026, and Stinson said she’s relieved that she won’t face a big tax bill. The Department of Education also said that it considers the “effective” date of the relief as the day that a borrower reaches their final payment. So even if their relief is not processed until next year, borrowers would not face taxes because of the 2025 effective dates.
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The first version of the IBR plan was created by Congress in 2007 and took effect in 2009. An updated version of the plan took effect in 2014. The plans were intended to make student-loan payments affordable; borrowers who enrolled in IBR before July 1, 2014, had payments that were 15% of their discretionary income with forgiveness after 25 years, while those who enrolled after July 1, 2014, had payments that were 10% of their discretionary income with forgiveness after 20 years.
Stinson said she can now put more money into her retirement accounts without having to worry about her student-loan payments.
“This has been the best week of my life,” she said.
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‘It was immense relief’
Brad Hill, 55, was expecting student-loan forgiveness — he just wasn’t sure when it would arrive. He has been making nearly $400 payments on student loans he used to finance his 1993 undergraduate and 2004 graduate degrees in business and engineering from the University of California, Berkeley, and the University of Southern California. He now works in the energy sector. While he said he was able to make his payments consistently, he felt there was no end in sight — especially after he thought he had reached his payment threshold in 2024.
He said he started feeling more hopeful once advocacy groups filed lawsuits against the Department of Education over stalled repayment plan processing, which could result in borrowers facing larger tax bills next year.
“There were a bunch of us in this category, frustrated and out of our minds with anxiety, whether what we were eligible for was actually going to wind up being a taxable event,” said Hill, who’s based in California.
Hill said he started with about $86,000 in student debt, and despite making qualifying payments on the IBR plan, he said it was “very, very frustrating” that the relief was stalled.
“I can’t imagine a more unsettling experience in terms of watching the wheels of federal policy turn and grind and seize up and leave millions and millions of people in an extraordinarily frustrating lurch,” Hill said.
At the time Hill took out his student loans, the interest rate was around 3%, and he said he viewed it as “a pretty fair deal economically” and has been able to use both of his degrees in his career. Still, both Hill and Stinson said that there should be better education on the impact of taking out student loans, especially since forgiveness is not guaranteed. Undergraduate students who took out federal loans for this school year would face an interest rate of 6.39%.
Stinson, for example, said that her son decided to go to trade school instead of college, and she’s happy he made the decision because he can avoid student loans.
“I really felt like I needed to go to college to get a better job, but then it didn’t seem like it was worth it until the last maybe 10 years because it just seemed like it was so slow for me to get better jobs and get better income overall,” Stinson said.
The Department of Education said it could take several months for servicers to process relief, so more borrowers might see their balances zero out as the year comes to a close.
Student-loan forgiveness could also be harder to achieve in the coming years. The department is working to implement a repayment overhaul that Trump codified in his “big beautiful” spending bill, which includes the creation of two income-driven repayment plans with less-generous terms than the existing ones, including forgiveness after 30 years.
Hill is glad the saga is finally over.
“It was immense relief that this suddenly kicked in,” Hill said.
