Deadline for many student borrowers to get loan forgiveness is coming up soon

The Biden administration is offering a temporary initiative for student loan borrowers hoping to get loan forgiveness.

The deadline is April 30.

Here are details from the Consumer Financial Protection Bureau:

Some borrowers need to consolidate their loans

To get the most credit toward loan cancelation, borrowers with the following federally managed loans listed below will need to consolidate them:

• Commercially held Federal Family Education Loan or FFEL.
• Parent PLUS loans.
• Perkins loans.
• Health Education Assistance Loan Program or HEAL loans.

After borrowers take this step, their new debt consolidation loan is eligible for the one-time adjustment and more of the payments they’ve made up to this point will be counted toward loan cancelation.

Many borrowers could qualify to have student loans canceled

The one-time adjustment will count more of the payments borrowers have made, so they can be added to the payments required for cancelation. The department gives borrowers credit towards loan cancelation through this adjustment if their loan is federally managed. The adjustment counts the loan payments made after July 1, 1994, and deferments, economic hardship, and forbearances, in some cases.

This means that through the adjustment student borrowers may be able to meet the cancelation requirements that is usually given to loans enrolled in an Income Driven Repayment program or IDR.

Most federal student loans already qualify for at least one IDR plan. Through an IDR, loans can be canceled after 10, 20, or 25 years of eligible payments. If student borrowers are seeking Public Service Loan Forgiveness or PSLF, these extra periods of payment count toward that program if they meet the other eligibility requirements. PSLF forgiveness can be received after 10 years of eligible payments.

Even if student loan borrowers don’t qualify for cancelation right now, an IDR program could help them lower their monthly payment. Through an IDR program, the monthly payment is based on income and family size, not the loan balance. Student loan borrowers can look into enrolling in an IDR program at any time.

Considerations for Parent PLUS borrowers

If student borrowers have a Parent PLUS loan managed by the Department of Education and at least 25 years – or 300 months – in repayment, their loan will be automatically canceled through this one-time adjustment.

If student borrowers don’t have 25 years in repayment, they should consolidate their Parent PLUS loan before the April 30 deadline to maximize the benefit.

Scammers charge student borrowers for doing what they can do for free

Student borrowers don’t need to pay a fee to consolidate their loans, receive loan cancelation, or reduce monthly payments. They can do it for free on the U.S. Department of Education’s website.

Where to get help with a payment count question

If a borrower thinks there’s an issue with their payment count, they can contact their loan servicer or submit a complaint to the Department of Education’s Federal Student Aid unit.