Student Loan Consolidation Deadline Extended

In 2023, the U.S. Department of Education (ED) implemented a one-time initiative to address historical issues in administering student loan program benefits. The initiative has provided relief to more than 900,000 borrowers who collectively owe almost $44 billion in student loans. This recent action is part of a broader effort led by the Biden Administration that has resulted in forgiving approximately $132 million in loans for more than 3.6 million borrowers to date.

The payment count adjustment is automatic for Direct or federally held Federal Family Education Loan (FFEL) program loans, requiring no application. It updates accounts for borrowers with federally managed loans, offering credit toward income-driven repayment (IDR) forgiveness and Public Service Loan Forgiveness (PSLF). ED is actively identifying eligible borrowers for forgiveness every two months, expediting relief for those who meet forgiveness thresholds.

The full payment count adjustment is expected to be completed by July 1, 2024, automatically updating progress toward forgiveness for all borrowers with Direct or FFEL program loans held by ED. Borrowers with loans not currently held by ED, like commercially held FFEL program or Perkins loans, can benefit from the adjustment by applying to consolidate into the Direct loan program before April 30, 2024.

Here are key points to note.

• Payment count adjustments will be automatic.
• The ongoing identification of eligible borrowers will provide faster relief.
• The timeline for completing the full adjustment is by July 1, 2024.
• Borrowers with commercially managed FFEL program or Perkins loans are encouraged to consolidate by April 30, 2024, to take advantage of the adjustment and loan forgiveness benefit.
• Borrowers with Parent PLUS loans and those in default can also access relief through specific measures outlined by ED.
• Joint consolidation loan borrowers can benefit from the adjustment after they are able to split their loans into a Direct Consolidation loan, even if the split occurs after the adjustment.

For more information, visit ED’s blog, Seven Things to Know About the Student Loan Payment Count Adjustment.