The Biden administration has approved over $150 billion in student loan forgiveness, including through the IDR Account Adjustment and the Public Service Loan Forgiveness program. However, both of these programs have upcoming application deadlines of April 30th. The IDR Account Adjustment is set to end this summer and requires certain borrowers to apply to consolidate their loans by April 30th to benefit. The PSLF program will undergo a processing suspension starting on May 1, during which no applications will be reviewed, so borrowers are encouraged to submit forms before April 30th.
The IDR Account Adjustment is a temporary program designed to fix problems with income-driven repayment plans. It has already approved over $49 billion in loan forgiveness for nearly a million borrowers. Borrowers with Direct loans can benefit from the adjustment automatically, while those with other types of federal loans must apply to consolidate them through the Direct loan program by April 30th. Consolidating loans can maximize IDR credit and may be necessary for non-Direct loan borrowers to receive PSLF credit as well.
The PSLF program is also facing a processing suspension starting on May 1, during which no applications will be reviewed. Borrowers are encouraged to submit forms before April 30th to avoid delays once the program resumes in July. Borrowers should download their current PSLF records from MOHELA before the suspension goes into effect to ensure access to important information like payment counts and qualifying employment periods.
In addition to these upcoming deadlines, the Biden administration recently released draft regulations for a new student loan forgiveness plan that could provide relief to 25 million borrowers. 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 deliver relief by the fall. This new program offers hope for significant debt relief for a large number of borrowers struggling with student loan debt.
Overall, borrowers with federal student loans are facing important deadlines for student loan forgiveness programs. By taking the necessary steps before the upcoming deadlines, borrowers can maximize their chances of qualifying for relief and minimize risks of significant delays in processing applications. The IDR Account Adjustment and PSLF program provide opportunities for borrowers to receive significant amounts of loan forgiveness, but borrowers must act quickly to ensure they meet the necessary requirements and deadlines.
