Forgiveness, PSLF Buyback and Tax Exposure

The 9th Circuit’s July 17 ruling cleared the way for about $23B in Sweet settlement discharges affecting 450,000 defrauded borrowers, expected by June 2027. Separate borrower-defense litigation could deliver another $11B to roughly 500,000 former for-profit students, while PSLF count losses from servicing errors lack a clear restoration process. IDR forgiveness is federally taxable again in 2026; PSLF, disability, and death discharges generally remain tax-exempt.