- Some student loan borrowers have up to one month to receive one-time account adjustments.
- Borrowers who do not have qualifying loans must consolidate their loan by April 30.
- The Ministry of Education plans to complete the adjustments to the accounts in July.
Some student loan borrowers have as little as a month to get closer to debt relief.
President Joe Biden’s Department of Education is nearing the end of its one-time account adjustment for borrowers on income-driven repayment plans and Public Service Loan Forgiveness.
First implemented last summer, the adjustment allowed the department to evaluate borrowers’ accounts every two months to determine which borrowers were eligible for debt relief but had not yet received it. received. The department said it expects the adjustments to be completed by July 1 — and while this happens automatically for some borrowers, others will soon need to take steps to benefit from the temporary provision.
To qualify for the adjustment, borrowers must participate in the Federal Direct Loan Program or the Federal Family Education Loan Program with government-held loans. The ministry recommends that those who do not have an eligible loan apply for consolidation in one of the programs before April 30.
“In general, it takes at least 60 days to process a direct consolidation loan application and disburse the new loan,” the department’s guidelines state.
The Consumer Financial Protection Bureau also issued a notice in early March reminding borrowers of the consolidation deadline. He said borrowers with the following federal loans will need to consolidate to qualify for the adjustment:
To consolidate, borrowers can go to studentaid.gov/loan-consolidation.
In August, the Department of Education erased $39 billion in student debt for 800,000 borrowers — the first group to receive relief through account adjustment. Since then, the department has continued to implement targeted relief measures for borrowers through the reform, most recently canceling $5 billion in student loans for 74,000 borrowers through the adjustment.
At the same time, the Ministry of Education is rolling out a series of efforts designed to make it easier for borrowers to repay. Through its new income-driven SAVE repayment plan, 153,000 borrowers were recently approved for $1.2 billion in relief — the result of a SAVE provision that allows borrowers who originally borrowed $12,000 $ or less to get relief with only 10 years of qualifying payments.
However, SAVE’s future is uncertain, given a new lawsuit filed by 11 GOP attorneys general to block the program and prevent aid from reaching borrowers. An Education Department official told Business Insider that it “will not stop fighting to provide support and relief to borrowers across the country, no matter how many times Republican elected officials try to stop us.” .
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