Act Fast: Student Loan Forgiveness Deadline Approaching April 30

Core Insights

Borrowers with Perkins or FFEL federal student loans have until April 30 to consolidate their loans and qualify for a payment count adjustment that will put them closer to forgiveness under income-driven repayment plan rules. This adjustment is part of President Joe Biden’s broader efforts to forgive student loan debt.

Deadline for Loan Consolidation

Borrowers with older federal student loans, such as Perkins or FFEL loans, can consolidate them into modern direct loans by April 30 to benefit from a one-time payment count adjustment. This adjustment provides more credit towards loan forgiveness under income-driven repayment plans or Public Service Loan Forgiveness programs.

Adjustments for Forgiveness

The Department of Education is offering additional credit towards forgiveness under income-driven repayment plans, forgiving remaining balances after 20 or 25 years of payments. The adjustment can add up to three years of credit for borrowers in deferment or forbearance.

Counts towards forgiveness under the Public Service Loan Forgiveness program are also being adjusted, forgiving loans after 10 years of payments while working for nonprofits or government agencies.

President Biden’s Initiative

The payment count adjustment aligns with President Biden’s goal to forgive student loan debt. Despite the Supreme Court rejecting his $20,000 forgiveness plan, the Department of Education has forgiven $143 billion by revising program rules.

This adjustment aims to rectify past errors by loan payment collection companies, potentially enabling immediate forgiveness for some borrowers. By December, $46 billion had been forgiven for over 930,500 borrowers through IDR program changes.

To benefit from the adjustment, borrowers with older federal loans must consolidate before the deadline.

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