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Hurry – you only have six weeks left to consolidate student loan debt and give yourself the best chance at forgiveness!
Now is your last opportunity to consolidate student loans and possibly have your debt cancelled!
The U.S. Education Department set April 30 as the deadline for federal student loan borrowers looking for one-time payment adjustments this summer and consolidation. Consolidation could assist anyone affected by loan servicing failures to receive credit for time already put toward paying back debt owed – an extension from Dec 31 was announced this time around.
Assuring all debt payments are counted is one way borrowers could get their remaining student loan balances cancelled or closer to being forgiven. Income-driven repayment (IDR) plans allow loans to be cancelled after 10, 20, or 25 years of eligible payments through income-driven repayment; extra payment periods count towards Public Service Loan Forgiveness (PSLF), provided they meet eligibility requirements; any extra payments uncovered by the Department of Education will also be reimbursed back into accounts.
This one-time initiative “provides much-needed relief to borrowers in repayment for 20 years or longer while offering all other borrowers an accurate picture of their progress toward forgiveness in the coming years,” wrote Richard Cordray, chief operating officer for the Federal Student Aid Office in a blog post last December. Thus far, updated payment counts have brought $45.7 billion of relief relief and 930,500 individuals have benefitted, according to estimates provided by Biden administration officials in January.
What You Should Do for an Automatic Adjustment
Borrowers who hold federal loans do not need to do anything themselves in order to receive one-time adjustments; rather, the Department of Education examines and adjusts them automatically.
Borrowers with privately held Federal Family Education Loan (FFEL), Perkins or Health Education Assistance Loan (HEAL) must apply for a Direct Consolidation Loan online or with paper forms by April 30 to be eligible for payment count adjustment. Most qualifying payments that exceeded 20-25 year forgiveness periods should receive refunds as reimbursement from the Department of Education, according to official statements released this month.
Parent PLUS loans managed by the Department of Education that have been in repayment for at least 25 years will automatically be cancelled through this one-time adjustment, according to Consumer Financial Protection Bureau estimates. Borrowers owing fewer than 25 years should consolidate by April 28 in order to take advantage of this benefit and qualify.
Be mindful that IDR recertification extension deadline could save students money when planning repayment plans for student loan debt repayment plans.
How can I identify what type of loan I currently hold? For assistance on student aid matters, visit StudentAid.gov website.
Clicking “Loan Breakdown” from your dashboard allows you to see a comprehensive listing of loans you currently hold.
Direct Loans begin with “Direct,” Federal Family Education Loan Program loans begin with “FFEL,” and Perkins Loans use “Perkins.” If your servicer begins with either “Dept. of Ed” or “Default Management Collection System,” chances are it is already held by the Education Department; otherwise it must be consolidated before April 30.
