The Biden Administration has announced that the loan consolidation deadline previously set for April 30 has been extended to June 30, 2024. This gives federal student loan borrowers time to consolidate their loans and qualify for forgiveness under the payment count adjustment and Public Service Loan Forgiveness program, even if they won’t have reached the number of payments necessary to qualify before the end of June.
The payment count adjustment is now anticipated to be fully implemented in September 2024. At that time, borrowers with Direct Loans or Federal Family Education Loan (FFEL) Program loans held by the U.S. Department of Education will see a full and accurate count of their progress toward loan forgiveness. Because of this updated timeline, borrowers with non-federally held FFEL loans (that’s 90% of all FFEL loan borrowers) who apply to consolidate by June 30 can still benefit from the payment count adjustment. The prior consolidation deadline was April 30.
“The Department is working swiftly to ensure borrowers get credit for every month they’ve rightfully earned toward forgiveness,” said U.S. Under Secretary of Education James Kvaal. “FFEL borrowers should consolidate as soon as possible in order to receive this benefit that has already provided forgiveness to nearly 1 million borrowers.”
The Department first announced the payment count adjustment in April 2022 to address extensive evidence, including from the U.S. Government Accountability Office, that borrowers did not have a proper accounting of their time to forgiveness under IDR plans, as well as widespread evidence that servicers had not been properly following regulations and Department of Education contracts governing the use of forbearances, resulting in borrowers spending excessive amounts of time in forbearances. To rectify these problems and ensure an accurate count going forward, the payment count adjustment automatically counts months in the following statuses:
• Any months in a repayment status, regardless of the payments made, loan type, or repayment plan;
• Twelve or more months of consecutive forbearance or 36 or more months of cumulative forbearance for any individual loan;
• Any months spent in economic hardship or military deferments in 2013 or later;
• Any months spent in any deferment (with the exception of in-school deferment) prior to 2013; and
• Any time in repayment (or deferment or forbearance, if applicable) on earlier loans before consolidation of those loans into a consolidation loan.
Borrowers also can receive credit toward PSLF for any month covered by the payment count adjustment as long as they certify their qualifying employment for that month.
If you’re unsure of what this announcement might mean for you, contact Martin Lynch at Cambridge Credit Counseling, a CEA member benefits partner. Cambridge provides free counseling to all CEA members. Until June 30, you can reach Martin seven days a week from 8 a.m. – 10 p.m. at (413) 883-3390.
Before calling, please access your account at studentaid.gov to determine what kind of loans you have, specifically whether your loans were issued through the Federal Family Education Loan Program, often abbreviated as “FFELP” in your dashboard. FFELP loans were issued through 2010. All loans issued after 2010 were made through the William Ford “Direct” loan program.
