Biden Administration Extends Loan Consolidation Deadline to Get Credit for Loan Forgiveness
By Maria Carrasco, NASFAA Staff Reporter
The Department of Education (ED) on Wednesday announced it will extend the deadline for borrowers to consolidate their loans into the Direct loan program in order for them to get credit for student loan forgiveness under the Public Service Loan Forgiveness (PSLF) program and income-driven repayment (IDR) plans.
This student loan forgiveness is part of ED’s efforts to “fix” the PSLF program and IDR plans where some qualifying payments were not being accounted for. With this one-time adjustment of borrowers’ payment count, ED said this fix ensures borrowers get proper credit for their payment progress under PSLF and IDR, where borrowers typically receive loan forgiveness after 10, 20, or 25 years in repayment — depending on the plan.
Initially, borrowers with non-federally held Federal Family Education Loans (FFEL) loans had until April 30, 2024, to apply to consolidate their loans in order to be eligible for this adjustment to provide more credit toward forgiveness. Now, these borrowers have until June 30, 2024, to apply to consolidate their loans.
“The Department is working swiftly to ensure borrowers get credit for every month they’ve rightfully earned toward forgiveness,” said Education Under Secretary James Kvaal, in a statement. “FFEL borrowers should consolidate as soon as possible in order to receive this benefit that has already provided forgiveness to nearly 1 million borrowers.”
In its press release, ED said it’s continuing to identify borrowers who have reached forgiveness thresholds and is working to implement changes that will give all borrowers an accurate count of their payments by September. When ED finishes processing the account adjustment in September, ED said it will “ensure that the adjustment has been applied to any loan held by the department at that time.”
Publication Date: 5/16/2024
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