The Education Department has extended the deadline for borrowers to take advantage of the IDR Account Adjustment, a student loan forgiveness initiative under the Biden administration. This program can help borrowers accelerate progress towards loan forgiveness under income-driven repayment plans by counting previously ineligible past loan periods. Nearly a million borrowers have already had their loans discharged through this initiative, and more than 800,000 borrowers have received loan forgiveness through the Public Service Loan Forgiveness program, thanks in part to the benefits of the account adjustment.
The extension gives borrowers more time to consolidate FFEL and Perkins loans into Direct loans, which are eligible for the IDR Account Adjustment. Borrowers can receive credit for nearly any past period of repayment, as well as for certain deferment and forbearance periods, thus maximizing their existing IDR credit. The new deadline of June 30 allows borrowers to consolidate loans and enroll in the new SAVE plan to receive the weighted average of IDR credit on the underlying loans.
For borrowers pursuing Public Service Loan Forgiveness, the account adjustment also allows them to maximize their PSLF credit by consolidating their loans by the June 30 deadline. The Education Department will credit the new Direct consolidation loan with the highest amount of PSLF credit based on the underlying loan with the highest qualifying payment count. PSLF payment counts will be reset to zero upon consolidation but will be updated again to reflect the benefits of the IDR Account Adjustment.
Parent PLUS borrowers can also benefit from the IDR Account Adjustment by consolidating their loans into a Direct consolidation loan, which can qualify for Income Contingent Repayment. This can help low-income parent borrowers qualify for IDR plans and potentially qualify for student loan forgiveness. The extension gives parent borrowers more time to take action and consolidate their loans to continue repaying them under an IDR plan. However, consolidating Parent PLUS loans with non-Parent PLUS loans could restrict the new Direct consolidation loan to ICR only.
The implementation of the IDR Account Adjustment has also been pushed to September, giving borrowers more time to take advantage of the program. By September, borrowers should be able to view their IDR progress and determine how much time they have remaining before qualifying for student loan forgiveness through a new dashboard on StudentAid.gov. This extension and adjustment to the program provide borrowers with additional opportunities to maximize their student loan forgiveness benefits and achieve financial relief.
