The Biden administration has extended the deadline for borrowers seeking student loan forgiveness under the IDR Account Adjustment initiative, allowing them until June 30 to consolidate their loans. This adjustment is meant to correct issues with income-driven repayment plans and the Public Service Loan Forgiveness program. The initiative provides retroactive credit for past loan periods that wouldn’t have counted toward forgiveness under previous rules, helping borrowers who lost progress due to administrative problems. The Education Department is working swiftly to ensure borrowers get credit for all months earned toward forgiveness.
The previous consolidation deadline of April 30 could have been problematic as consolidating loans previously credited under IDR or PSLF would have resulted in the loss of that credit. The IDR Account Adjustment waived this rule, allowing prior periods to count toward forgiveness. New PSLF regulations that preserve PSLF credit after consolidation took effect last summer, but results are not as generous as the IDR Account Adjustment. The extension of the consolidation deadline to June 30 reduces the risk for borrowers applying for consolidation between April 30 and July 1, providing proper credit for progress made towards loan forgiveness under IDR and PSLF.
The Education Department has approved over $49 billion in student loan forgiveness for nearly 1 million borrowers under the IDR Account Adjustment initiative. Implementation of the adjustment is expected to be completed in September, rather than July as previously indicated. Borrowers with Direct or FFEL Program loans will see a full and accurate count of their progress toward forgiveness at that time. Those not enrolled in an IDR plan will need to switch to a plan like SAVE to continue making progress toward eventual loan forgiveness if they are short of the threshold for immediate discharge.
Under the one-time adjustment initiative, borrowers with federal student loans administered by the Education Department can qualify for the IDR credit automatically. But those with other types of federal loans, such as FFEL, Perkins, or HEAL loans, must consolidate into the Direct loan program to qualify. The extension of the consolidation deadline provides relief to borrowers seeking forgiveness and ensures they receive proper credit for their payments. The Education Department is working to implement the account adjustment as quickly as possible to rectify past errors and help borrowers on their path to loan forgiveness.
The extension of the consolidation deadline to June 30 helps borrowers who need to consolidate loans to qualify for the IDR Account Adjustment initiative. The initiative aims to fix problems with income-driven repayment plans and the Public Service Loan Forgiveness program, ensuring borrowers receive the credit they deserve. The Education Department is committed to completing the implementation of the account adjustment by September to provide borrowers with an accurate count of their progress toward loan forgiveness. This extension offers relief to borrowers facing challenges with loan consolidation and allows them to benefit from the adjustments made to the forgiveness programs.
