Extended Deadline for Loan Consolidation by Biden-Harris Administration to Help Borrowers Receive Credit for Loan Forgiveness Programs

The Biden-Harris Administration has provided an update on the timeline for the payment count adjustment. This fix ensures that borrowers receive proper credit for their progress towards income-driven repayment (IDR) forgiveness and Public Service Loan Forgiveness (PSLF). The full implementation of the payment count adjustment is now expected in September 2024. Borrowers with Direct Loans or Federal Family Education Loan (FFEL) Program loans held by the U.S. Department of Education will then have an accurate count of their progress towards loan forgiveness. Due to this revised timeline, borrowers with non-federally held FFEL loans who apply for consolidation by June 30 can still take advantage of the payment count adjustment. The previous consolidation deadline was April 30.

“The Department is diligently working to ensure that borrowers are credited for every month they have earned towards forgiveness,” stated U.S. Under Secretary of Education James Kvaal. “FFEL borrowers are encouraged to consolidate soon to benefit from this measure that has already granted forgiveness to nearly 1 million borrowers.”

In April 2022, the Department initially announced the payment count adjustment to address significant evidence, including reports from the U.S. Government Accountability Office, indicating that borrowers did not have an accurate account of their progress towards forgiveness under IDR plans. The adjustment automatically includes months in various statuses, such as repayment, forbearance, deferment, and economic hardship or military deferments. Borrowers can also receive credit towards PSLF for qualifying employment months covered by the payment count adjustment, as long as they certify their employment.

The Department has already identified eligible borrowers for forgiveness under the payment count adjustment and began discharging those borrowers who qualify for forgiveness after 20 or 25 years of payments, or for those who reached the required 120 months of repayment and certified employment for PSLF. The Department has approved $49.2 billion in forgiveness for over 996,000 borrowers, with more borrowers being identified for relief.

The payment count adjustment will be processed automatically for Direct Loan borrowers. Borrowers with FFEL Program loans held by the Department will also receive the adjustment automatically but must consolidate into the Direct Loan Program to count previous repayment time towards PSLF. Borrowers with other federal loan types would need to consolidate to Direct Loans to receive the payment count adjustment.