The U.S. Department of Education will conduct a one-time adjustment for more than 3.6M Direct Loan borrowers this summer and give student loan borrowers at least three years of credit toward loan forgiveness.
Some could see their entire balance forgiven automatically if they receive the adjustment before the student loan forgiveness deadline. See Federal Student Aid’s post on the adjustment for more information.
The most well-known Federal student loan forgiveness program is the Public Service Loan Forgiveness (PSLF) program. PSLF forgives the remaining balance on federal student loans after 120 qualifying monthly payments while working full-time for a qualifying employer, such as a government agency or non-profit organization.
The recent announcement by the Department of Education builds on these existing efforts by providing a one-time adjustment that could significantly benefit millions of borrowers. This adjustment aims to credit borrowers with additional qualifying payments towards forgiveness, potentially even leading to full loan forgiveness for some.
How to Receive Credit Towards Student Loan Cancellation
The djustment is already underway and should be completed by July 1 for all Direct Loans and FFEL Program loans that are managed by ED.
Borrowers with Commercially-held FFEL, Parent PLUS, Perkins, or HEAL Loans need to apply for a Direct-Consolidation Loan to qualify for the one-time adjustment.
The student loan forgiveness deadline to apply for consolidation is April 30, 2024. There is no fee to consolidate federal loans. It can take at least 60 days to process a loan application. Submitting an application alone does not guarantee any benefits under the adjustment.
Unsure if your student loans qualify or need help applying for consolidation?
Contact an ION student loan repayment counselor through the ION portal today!