Do This by April 30th If You Want to Receive Loan Forgiveness This Year.
The Biden administration has already forgiven more than $45 billion in student loans for nearly one million borrowers through a one-time account adjustment in income-driven repayment (IDR) plans. If you’ve been faithfully paying off your student loans for at least ten years, you could be next in line to receive this significant help, but you’ll need to act quickly.
What is the student loan forgiveness period?
The Department of Education has set April 30, 2024, as the deadline for consolidating certain types of Federal loans and enrolling in an IDR plan to maximize the benefits of this one-time account adjustment. Borrowers who miss this deadline may still receive some credit for past payments, but will not receive the full forgiveness that is available by meeting the April 30 consolidation requirement.
Specifically, borrowers with commercial FFEL, Perkins or HEAL loans, as well as borrowers with mixed loan types, will be required to consolidate into a new direct consolidation loan by the due date. This ensures that the repayment history of the oldest underlying loans will be fully counted toward forgiveness.
The IDR account adjustment applies only to loans consolidated into a direct consolidation loan. These types of loans require immediate consolidation to qualify for the upcoming IDR account adjustment:
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FFELP Commercial Loans
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Perkins Commercial Loans
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HEALING credits
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Parent PLUS loans with a maturity of less than 25 years (or less than 10 years if eligible for Public Service Loan Forgiveness)
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Direct loans with varying numbers of past payments
If your loans aren’t on this list, you probably don’t need to take any action right now. If your loans are on the list above, read on to find out what steps you should take as soon as possible.
How to get loan forgiveness this year
To access the application, go to StudentAid.gov/loan-consolidation . The online form should automatically populate contact and loan information for most borrowers. Just be sure to confirm what types of loans you have, select the ones you want to consolidate, select an IDR plan , and provide some basic personal information. Depending on your situation, you may need to provide additional documentation, such as proof of economic hardship or disability. Be sure to respond promptly to any inquiries from your credit servicer.
According to the Federal Student Aid Administration, the entire process should take less than 30 minutes. For assistance or to apply for consolidation by telephone, contact the Federal Student Aid Clearinghouse at 800-433-3243.
Typically, you cannot consolidate an existing consolidation loan unless you apply for PSLF or add another loan to it, such as a Perkins loan, that you have not previously consolidated.
Bottom line
Borrowers who miss the April 30 deadline will not be completely out of luck, as they can still receive partial credit on their past IDR payments. But to maximize the forgiveness you’re eligible for, it’s critical to consolidate your loans by the end of this month. Don’t delay—take action now to put yourself in the best position to get significant student debt relief this year.