An urgent administrative deadline could expose eligible borrowers to significant tax liability if they fail to act by Dec. 31, 2025. University Business and AL.com report that borrowers on the SAVE plan who already qualify for forgiveness (300 qualifying payments) must apply to switch to a different income-driven repayment plan by year-end to avoid taxable discharges. The guidance affects students whose loan discharges would otherwise be processed and potentially treated as taxable events under current tax rules. Institutions’ financial-aid offices and alumni services should proactively notify affected graduates and current students and update counseling scripts to reflect timing and application requirements. Financial-aid leaders should coordinate with state higher-education agencies and loan servicers to ensure notices are clear, and consider hosting webinars or clinics for borrowers at risk of a tax 'bomb' from an improperly processed discharge.