As two key deadlines for student loan forgiveness approaches, borrowers are being urged to take action before April 30th in order to qualify for relief or avoid delays. The Biden administration has already approved over $150 billion in student loan forgiveness through various programs, with the IDR Account Adjustment and Public Service Loan Forgiveness program being significant parts of this relief. The IDR Account Adjustment, which credits borrowers with time towards their repayment term for certain periods that may not have counted previously, is set to end this summer. Borrowers with non-Direct federal loans must consolidate them through the Direct loan program by April 30th to benefit from this initiative.
Consolidating loans can also help borrowers maximize their credit under the IDR Account Adjustment, as well as potentially qualify for PSLF credit. Those with commercially held FFEL or Perkins or HEAL loans are encouraged to consolidate them by the April 30th deadline to benefit from this initiative, which has already approved over $49 billion in loan forgiveness for nearly a million borrowers. While submitting a consolidation application does not guarantee benefits under the account adjustment, doing so before April 30th can allow borrowers to receive the associated benefits once the consolidation process is complete.
Additionally, the Public Service Loan Forgiveness program is facing a suspension in processing applications starting on May 1, with no applications or employment certifications being reviewed or processed until at least July. Borrowers are advised to submit PSLF applications by April 30th to ensure they are in the system before the pause begins, potentially expediting processing once the suspension is lifted. It is recommended for borrowers to download their current PSLF records from MOHELA before May 1, as access to this information may be limited during and after the pause.
In another significant development, the Biden administration has released draft regulations for a new student loan forgiveness plan that could provide relief to 25 million borrowers through multiple avenues. The public has until May 17th to submit comments on the draft rules, with the Education Department aiming to finalize the rules in time to start delivering relief by the fall. This new program, if enacted, could offer additional opportunities for borrowers to receive student loan forgiveness, further easing the burden of student debt for millions of borrowers across the country.
