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How To Get Student Loan Forgiveness Under Biden Program

How To Get Student Loan Forgiveness Under Biden Program

Zina Kumok

Zina Kumok is a personal finance writer and speaker with a background in financial literacy, student loans, credit scores, and investing. She's a three-time nominee and finalist for Best Personal Finance Contributor at the Plutus Awards. Zina paid off $28,000 in student loans in three years. Holding a bachelor's degree in journalism from Indiana University, she has worked for newspapers, magazines, and wire services. Her byline has appeared in Indianapolis Monthly, the Commercial Appeal, and the Associated Press, and as an expert, she's been featured in the Washington Post, Forbes, Fox Business, and Time. Additionally, Zina is a Certified Financial Health Counselor and Student Loan Counselor.

Even though President Biden has not been able to pass widespread loan forgiveness, millions of borrowers have had their loans partially or completely forgiven through specific programs.

Currently, there is still one more program available to many borrowers: the IDR waiver. And while the initial deadline was supposed to be December 31st, it has now been extended until April 30, 2024.

However, just because you have more time to apply does not mean you should procrastinate. Depending on your student loans, you may have to consolidate them before you can apply for the waiver. And consolidation can take time. Keep reading to understand how the IDR waiver works, who is eligible and how much you could save.

What is the IDR Account Adjustment?

Years ago, the federal government established income-driven repayment (IDR) plans to help borrowers more easily afford their student loan payments. After making a certain number of payments on an IDR plan, either 20 or 25 years worth, the remaining loan balance would then be forgiven. The required term is generally 20 years for undergraduate loans and 25 years for graduate loans or Parent PLUS loans.

Unfortunately, many loan servicers did not accurately count monthly payments for borrowers. Those borrowers may have made months or even years of eligible payments that were not counted toward their required amount.

In 2022, President Biden announced the IDR Account Adjustment program which would let borrowers go back and accurately tally previous payments toward the IDR loan forgiveness program. Some borrowers who do this may even reach the total number of payments necessary for loan forgiveness.

The federal government may also count months when your loans were in deferment or forbearance. In fact, if you spent at least 12 months in consecutive forbearance or 36 months in total forbearance, those months will now count toward IDR loan forgiveness. This is a huge win for borrowers, especially those who had financial problems and needed time off from student loan payments.

These eligible periods will also include:

  • Any time in deferment except for in-school deferment before 2013
  • Any time in military or economic hardship deferment for 2013 or later
  • Any repayment period before consolidation

Unfortunately, this adjustment program is temporary and expires April 30, 2024. If you do not file for this waiver, then you may not receive the extra credit you deserve.

According to the Department of Education, more than 3.5 million borrowers could receive up to three years of payments counted toward their total. Some students may even qualify for complete loan forgiveness once they go through this process.

Who is eligible for the IDR Account Adjustment?

Almost all borrowers with federal student loans can qualify for the IDR Account Adjustment. However, if you have one of the following student loans, you will have to consolidate them into a Direct Consolidation Loan to have your payments counted:

  • Commercially-held FFEL loans
  • Perkins loans
  • HEAL loans

The consolidation process can also give you credit for IDR payments. However, you may have to consolidate by April 30, 2024 to have your loans be eligible for this special waiver. Most experts recommend consolidating long before that date just in case you run into any problems.

Who should look into this program?

If you’ve been making payments toward your loans for years, you should consider looking into the IDR waiver. This program may benefit those who have been paying for 10+ years because they may be closer to loan forgiveness.

Even if you’re not working toward IDR loan forgiveness right now, it may still be worth looking into this program. Borrowers who are participating in Public Service Loan Forgiveness (PSLF) need to be on an IDR plan to qualify for PSLF. However, if some of your payments were not counted as IDR, then you may wind up paying more than necessary.

The federal government claims that since the inception of the IDR account adjustment program, more than 800,000 borrowers have had their loan balances forgiven.

How long will it take for me to see an adjustment?

Because so many borrowers have applied for this program - and may continue to apply until the deadline - it’s hard to say how long the adjustment process will take. Make sure to check in every few weeks to see if your account has been updated.

If my loans have already been forgiven, can I apply for a refund?

If you already had student loans forgiven and believe you made overpayments, you unfortunately are not eligible to apply for a refund. If you think you have any other extenuating circumstances, you should contact a student loan lawyer and ask for more specific advice.

What if my loans are in default?

Even if your federal loans are currently in default, you can still apply for this program through the Fresh Start initiative. The Fresh Start program can help borrowers get out of default so they can become eligible for waivers and programs, like the IDR account adjustment.

If your loans are currently in default, you should apply to Fresh Start as soon as possible. It can take time before your loans are restored so you should do this ASAP if you want to qualify for the IDR waiver.

If you are not interested in or eligible for the IDR waiver, you can still use the Fresh Start program to get out of default. This can give you access to other benefits and perks associated with federal student loans, including income-driven repayment plans.

Where can I find help applying for this waiver?

Student loans have always been complicated, but these waivers have put yet another wrinkle in the system. If you have any questions about the waiver, you can reach out to your loan servicer or contact the Federal Student Aid Information Center (FSAIC) at 1-800-433-3243. You can send them an email or use their live chat feature.

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