With the American Rescue Plan, Congress temporarily stopped treating loan cancellation as taxable income until Jan. 1, 2026. The trouble started with the SAVE PlanThe Education Department largely blames these delays in debt cancellation on the Biden administration and the federal courts. The Education Department has used the legal uncertainty around SAVE to justify halting cancellation under ICR, PAYE and IBR. Millions of student loan borrowers are at risk of defaulting, data shows New data reveals a growing problem; millions of federal student loan borrowers are at serious risk of default. “One in three federal student loan borrowers that are in repayment right now are in some stage of delinquency,” says Daniel Mangrum, a research economist at the Federal Reserve Bank of New York.