Two very important due dates for applying for student loan forgiveness are coming up quickly. Some users may need to take certain steps by April 30th to get any help with their student loans or at least lower their chances of having to wait a long time.
So far, the Biden government has approved more than $150 billion in loan cancellations. This has been done through a number of different programs, such as temporary ones and full loan forgiveness. One of these waivers called the IDR Account Adjustment, has already forgiven more than a third of that amount.
This makes it one of President Biden’s most important student loan relief programs. The account adjustment will end this summer, though, so some borrowers may need to apply to combine their loans before April 30th to get the most out of it.
At the same time, the Public Service Loan Forgiveness program has a big deadline coming up on the same day. This program is a big part of the $150 billion in debt relief that the Biden government approved. PSLF is about to go through an extended working suspension. During this time, no PSLF applications will be looked at. Borrowers are being told by advocates to send in PSLF forms and do other important things before April 30th.
Here are the details.
April 30th Is the Key Student Loan Forgiveness Application Deadline For IDR Account Adjustment
By waiving some requirements for a short time, the IDR Account Adjustment is a temporary program run by the Biden administration that aims to “fix” long-standing issues with income-driven payback plans.
People who take out IDR can get their school loans forgiven after 20 or 25 years of payments. But problems with administration, rules that were hard to understand, behaviors that encouraged forbearance, and poor control have caused many problems that have made it hard to get relief.
The account change is meant to fix this by adding time to the borrower’s IDR loan forgiveness term for things that might not have been counted before, like payments made on other payment plans or during deferment and forbearance periods. Already, the account change has been a huge success. More than $49 billion in loan forgiveness has been given to almost a million users.
But the project is only temporary, and it will end this summer. People who have Direct loans or other federal student loans owned by the Education Department can get the adjustment immediately. But people who have other types of federal loans must apply to consolidate them through the Direct loan program by April 30th.
The department says that if you have commercially owned FFEL loans, Perkins loans, or HEAL loans, you should combine them by April 30, 2024, to get the payment count adjustment. In order to get the benefits of the IDR Account Adjustment, the borrower must send the application before the deadline. The consolidation process can take up to sixty days.
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Borrowers can get the most IDR credit under the account change by consolidating their loans. This is because the department says it will give the new consolidation loan the most loan forgiveness “time” based on the loan that has been paid off the longest. Non-direct loan users may also need to consolidate their debt in order to get PSLF credit, which is also possible with the change.
The department says that sending in a consolidation application does not promise that you will get any benefits from the payment count adjustment. “In general, it takes at least 60 days to process an application for a Direct Consolidation Loan and give out the new loan.” In other words, you have until April 30, 2024, to fill out an application for loan consolidation if you want to get the benefit of the change.
Adam S. Minsky Shared the deadline date via a tweet on 8:47 PM · Apr 19, 2024
🚨 Two highly significant student loan forgiveness application deadlines are rapidly approaching. Some borrowers should take certain steps by April 30th.https://t.co/iPlGBq6WrF
— Adam S. Minsky (@AdamSMinsky) April 19, 2024
April 30th Is Also Key Student Loan Forgiveness Date For PSLF
The PSLF program is about to go through a long working pause that is separate from the IDR Account Adjustment. Starting May 1, PSLF applications for student loan forgiveness or job certifications will not be looked at or processed until at least July. This is because the department is moving the PSLF servicing interface from MOHELA to StudentAid.gov.
Borrowers may want to send in a PSLF application by April 30th so that it is in the system before the pause starts. This could be to ask for loan forgiveness or just to change the number of payments that qualify for PSLF. Even though it’s unlikely that the forms will be reviewed or handled before August, this could speed up the process once the suspension ends, since there will likely be a backlog and delays when the program starts up again.
“We anticipate substantial PSLF processing delays after the pause ends,” said the National Consumer Law Center in a new blog post covering the suspension. “Borrowers should be prepared for significant delays in processing Employment Certification Forms (ECF), updating PSLF payment counts, and processing loan forgiveness applications for eligible borrowers.”
In addition, borrowers may want to download their current PSLF records from MOHELA before the suspension goes into effect, because they will lose access to their current PSLF information starting on May 1. This includes qualifying employment periods, PSLF payment counts, and month-by-month breakdowns of eligible and ineligible payments.
“It is very likely that some borrowers’ account information, including qualifying payment counts, may be inaccurately reported on studentaid.gov or may not be reported at all for some time after the processing pause,” warned NCLC in the blog post. “We strongly advise borrowers to download all PSLF payment count and tracking information from MOHELA by April 30th, as that information may not be available or accessible on MOHELA’s website during and after the processing pause.”
Another important deadline for forgiving student loans is May 17th.
Also, earlier this week, the Biden government released draft rules for a brand-new plan to forgive student loans. If this program is put into action, it could help 25 million people get out of debt in a number of ways.
With the draft rules formally published, the public now has a 30-day period to submit comments, with a deadline of May 17th. The Education Department “will carefully consider comments received and aims to finalize these rules in time to start delivering relief,” which the administration anticipates happening by the fall, according to a department statement earlier this week.
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