In May, President Joe Biden’s Education Department announced that it was extending the deadline for borrowers on income-driven repayment plans and the Public Service Loan Forgiveness program to benefit from the one-time account adjustments.
The adjustments, expected to be fully implemented in September, are intended to evaluate borrowers’ accounts and ensure their payments are up to date. They would bring them closer to the loan forgiveness promised through their repayment programs or push them over the threshold and automatically grant them debt relief.
To qualify for the adjustments, though, borrowers are only eligible if they have federal direct loans or federally held loans in the Federal Family Education Loan program. Borrowers who do not have qualifying loans have to consolidate into one of those programs by June 30 because the consolidation process could take at least 60 days.
Borrowers can apply for consolidation here, and according to Federal Student Aid, it typically takes less than 30 minutes to complete.
“The Department is working swiftly to ensure borrowers get credit for every month they’ve rightfully earned toward forgiveness,” Under Secretary of Education James Kvaal previously said in a statement. “FFEL borrowers should consolidate as soon as possible in order to receive this benefit that has already provided forgiveness to nearly 1 million borrowers.”
Most recently, the Education Department canceled $7.7 billion in student debt for 160,500 borrowers, some of which were a result of the one-time account adjustments. As of that May announcement, one of every 10 federal borrowers has now been approved for debt relief.
Beyond the adjustments, the Education Department is also enacting relief for borrowers on the new SAVE income-driven repayment plan — borrowers with original balances of $12,000 or less are getting relief with as few as 10 years of qualifying payments.
The department is also working on enacting its broader student-loan forgiveness plan, which is intended to benefit over 30 million borrowers. The plan concluded its public comment period, and the department is now working on finalizing the rules with a goal of implementation this fall.
While there are ongoing legal challenges to block the SAVE plan — and legal threats brewing to block the broader debt relief plan — the Education Department has maintained that its efforts are in accordance with the law and the Supreme Court decision to strike down Biden’s first plan for relief last summer.
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