Sweeping student loan forgiveness changes for federal student loans are going into effect this year, and millions of borrower will be impacted. Here's a breakdown.

While many types of student loan forgiveness are tax-free federally, several states may levy taxes on student loan forgiveness. Even though some popular programs like Public Service Loan Forgiveness (PSLF) are tax free federally,

The federal Repayment Assistance Plan, or RAP, will be the newest student loan repayment plan. President Donald Trump’s “big, beautiful bill,” passed in 2025, made many changes to federal student loan programs.

Those affected by the change "are obviously, and rightfully so, really worried about this," one advocate said.

A provision that made student-loan forgiveness tax-free is expiring in 2026. It could put borrowers on the hook for thousands of dollars in taxes.

While some routes to loan discharges have been blocked or delayed in 2025, the Department of Education has still granted borrowers billions of dollars in forgiveness.