It’s last call to consolidate your student loans and have a shot at getting your debt canceled.
The U.S. Education Department set April 30 as the deadline for borrowers to consolidate federal student loans and get a one-time payment adjustment this summer. Consolidating debt could help anyone hurt by loan servicing failures receive credit for the time they have already spent in repayment. The April deadline was extended from Dec. 31.
Ensuring that all debt payments are counted could get borrowers’ remaining student loan balances canceled or bring them closer to it. Through an income-driven repayment (IDR) plan, loans can be canceled after 10, 20, or 25 years of eligible payments. If borrowers are seeking Public Service Loan Forgiveness (PSLF), these extra payment periods count toward that program if they meet other eligibility requirements. Any extra payments the Department of Education uncovers will be refunded too.
This one-time initiative “provides much-needed relief to borrowers who have been in repayment for 20 years or more and gives all other borrowers an accurate picture of their progress toward forgiveness going forward,” Richard Cordray, chief operating officer of the Federal Student Aid Office, wrote in a blog post last December. Updated payment counts have so far provided $45.7 billion in relief for 930,500 borrowers, the Biden administration said in January.
What you need to do to get a one-time adjustment
Many borrowers with federally held loans don’t…
