Editor's Note: The $39 billion in forgiveness announced on July 14, 2023 by the Biden administration is directly due to the IDR Waiver / IDR Account Adjustment mentioned in this article. This $39 billion is a fraction of the more than $200 billion that could be eligible for complete tax-free cancellation. And borrowers who fall short of the 20 or 25 years needed for forgiveness could shave years off of their repayment period even if they don't qualify for cancellation right away. Read more below to see if you could qualify.
Key takeaways:
- The IDR waiver one-time account adjustment will occur automatically (no application needed) for most borrowers later in 2023.
- 12 months of consecutive forbearance (or more) or 36 months of total forbearance (or more) now count toward forgiveness.
- Any time in repayment (or qualifying periods of forbearance or deferment) now counts toward forgiveness, even if you consolidate.
- The IDR waiver applies to private sector and public sector workers.
- 4 million or more borrowers could receive total forgiveness if they consolidate before the deadline.
- To qualify, some borrowers must consolidate their loans before December 31, 2023.
If you're a student loan borrower paying back your federal student loans using an income-driven repayment (IDR) plan, the Biden Administration's IDR waiver, also known as the IDR Account Adjustment, is a big deal. Any time in repayment and many periods of forbearance or deferment can now be counted toward the 10-year Public Service Loan Forgiveness and 20- or 25-year IDR forgiveness programs.
Perhaps millions of borrowers could see their entire balances wiped away completely. But unfortunately, many borrowers need to take action by the Administration's December 31, 2023, deadline.
Here's what we know about President Biden's IDR waiver program and how to use it to shave years or even decades off of your student loan repayment journey.
If you need a customized plan to make the most of the IDR waiver, book a time with one of our top-rated student loan consultants.
One-time IDR account adjustment: What is the IDR waiver?
The IDR Waiver is a one-time account adjustment by the Department of Education. It gives federal student loan borrowers credit toward forgiveness. All Direct Loan program borrowers, including graduate and Parent PLUS Loan holders, will receive at least three years of credit toward forgiveness. Millions of borrowers who have been repaying their student loans for more than 20 years will receive student loan forgiveness automatically with this account adjustment (more on this below).
To do this, the U.S. Department of Education is using its broad authority over student loans due to the pandemic national public health emergency. It results in extraordinarily generous changes to specific forgiveness programs that could get you out of student loan debt years sooner (or even immediately).
The Department of Education previously enacted a Public Service Loan Forgiveness (PSLF) program Waiver. Under this program, which was announced in October 2021 and expired at the end of October 2022, prior payments before consolidation were counted for loan forgiveness.
Payments made under any repayment plan counted, too, as long as you worked full-time for a nonprofit or government employer during the period in question.
With the IDR waiver, the Administration has broadened this assistance to a much larger group of borrowers and repayment statuses.
The PSLF Waiver only helped public servants. Plus, it only awarded credit for the time a borrower was in an actual repayment plan.
All borrowers can now receive credit toward IDR forgiveness for any type of repayment plan as well as qualifying forbearance periods and some types of deferment. More on that soon.
Like the PSLF waiver, borrowers with commercially-held debt with the Federal Family Education Loan program (FFEL) need to consolidate.
The deadline for consolidation to take advantage of these benefits is December 31, 2023. Due to potential legal challenges against the waiver, we urge borrowers with commercially-held FFEL loans to consolidate immediately.
If you have loans that weren't paused during the pandemic that show up when you log in to StudentAid.gov, then you have commercially held FFEL loans.
If you have this loan type, you should probably consolidate all of your debt together before the deadline. Doing so could bring you very close to having your entire balance forgiven under these new rules.
Who will benefit from the IDR waiver?
The PSLF waiver only applied to borrowers in the public sector or who used to work in the public sector. But the IDR waiver now applies to ALL borrowers with federal student loans, meaning both private and public sector workers can benefit.
For borrowers pursuing PSLF, you can get credit toward your 10-year time requirement.
Borrowers not working toward PSLF can receive credit toward student loan forgiveness programs, like IDR forgiveness, over 20 or 25 years.
For example, if you have paid on your undergraduate loans since 2006 and work in the private sector, you could consolidate before December 31, 2023, under the IDR waiver. In doing so, you can receive up to 17 years of IDR payment credit toward 20-year forgiveness under the Revised Pay As You Earn (REPAYE) plan.
You would only need three additional years of payments on an income-driven repayment plan. Then, your loan balance could be completely forgiven.
A physician who deferred her loans during residency for four years can get all four of those years counted toward the PSLF program now, thanks to the IDR waiver.
These examples show how the IDR waiver could help all types of borrowers regardless of employment status.
One minor IDR Waiver caveat for PSLF borrowers
There's one minor limiting factor about the IDR Waiver that I can find, and it only affects public sector borrowers. To receive total forgiveness for PSLF under the IDR waiver rules, you must be working for a qualifying employer when the Department of Education makes the IDR Account Adjustment to your forgiveness credit.
The PSLF Waiver didn't require you to work for a qualifying employer when they wiped your debt. So, that's slightly less generous.
Do deferment and forbearance periods qualify for loan forgiveness under the IDR waiver?
PSLF and IDR borrowers would receive credit toward forgiveness if they were in more than 12 months of consecutive forbearance. The same applies if you have 36 months of cumulative forbearance.
If you have less than 12 consecutive months of forbearance, or 36 months or less of aggregate forbearance, then this credit doesn't qualify. In this case, you need to file a complaint with the FSA Ombudsman to review your situation.
Deferment before 2013 also counts for IDR and PSLF forgiveness, excluding in-school deferment. This is because the Department can't identify who was in economic hardship deferment and who wasn't. So, they're giving credit for all types of deferments.
For deferments after 2013, you must've been in a specific type of deferment. For example, active-duty deferment or economic hardship deferment are eligible. Most types of deferment qualify without a time requirement, as with the forbearance 12-month consecutive/36-month aggregate rule.
Notably, you can consolidate and still receive credit for qualifying periods of deferments and forbearances before the consolidation.
Great news: Time in any repayment plan now qualifies for forgiveness
The IDR waiver gives borrowers credit for any repayment plan toward IDR forgiveness, even payments made prior to consolidation.
As an example, consider a borrower who has paid her loans under the Extended Repayment Plan since 2002. She would normally receive zero credit toward IDR forgiveness since the Extended Repayment Plan isn't based on income.
But under the IDR waiver, she could get credit for all those now-qualifying payments and either have her loans completely forgiven or be very close to forgiveness.
If she has loans with different payment histories, she could consolidate to get a very large amount of IDR credit on the new Direct consolidation loan based on the old repayment history of her oldest loan.
Related: How to Know If You Need a Consult with Student Loan Planner®: 7 Situations to Consider
Most payment statuses pre-consolidation now qualify
Borrowers who made payments pre-consolidation can now get credit, too.
It appears that the Department of Education is following the same game plan as it did for the PSLF waiver. Borrowers are getting credit for the loan with the most amount of monthly payments applied to their overall consolidation loan.
Many borrowers can consolidate older loans along with graduate degree loans and get much faster credit toward forgiveness overall.
The IDR Waiver is even better than the PSLF Waiver, as forbearance and deferment pre-consolidation also can count toward loan forgiveness.
Related: Student Loan Consolidation for Forgiveness: Do It Before or After the IDR Waiver?
How to consolidate federal loans to get the IDR waiver
To consolidate your federal student loans, go to the Direct Consolidation Loan Application on the StudentAid.gov website. Use StudentLoanPlanner.com/consolidate for an easy-to-remember shortcut.
Start by logging into your account and selecting the loans you want to consolidate. Be sure the boxes next to each of your loans has a check mark. Your new Direct Consolidation Loan will reflect the loans you select, as shown below.
Then, select your preferred federal loan servicer. If you're pursuing PSLF, you'll need to select MOHELA as your servicer. If not, we recommend sticking with your existing loan servicer.
You'll then be able to enter your adjusted gross income, tax filing status, family size and state of residence. This information will generate estimated repayment information under each of the different IDR plans available.
Next, select your desired repayment plan. If you skip this step, your loan servicer will automatically apply the Standard repayment plan to your new loan.
From here, you'll finish out the Direct Consolidation Loan application with a few additional questions related to your employment and family details (e.g., number of dependents). You'll also need to provide income information. The easiest way to do this is to use the IRS Data Retrieval Tool.
Finally, you'll need to review the terms and conditions of the new consolidated loan and finish providing additional personal information. Then, review the application for accuracy and sign for the new loan.
Most borrowers with FFELs from before 2010 must take action
Borrowers with commercially held FFELP loans urgently need to consolidate before the deadline to qualify for the IDR waiver.
This is because program requirements prevent the Department of Education from granting credit automatically on this type of loan.
It's also possible that we'll see a lawsuit from investors to block relief for this type of loan.
As stated earlier, if you were still required to make payments during the student loan payment pause despite your student debt showing up on the Federal StudentAid.gov website, then you have this kind of student loan. You need to consolidate to receive credit under the IDR waiver.
Who will receive loan cancellation relief with the IDR waiver? Likely millions
According to NPR, 4.4 million borrowers have been in repayment for at least 20 years. This is the minimum threshold to receive IDR forgiveness.
Most of these borrowers would not qualify for Pay As You Earn. Therefore, most would probably have to seek forgiveness under the REPAYE rules. It allows for forgiveness after 20 years for undergraduate loans and 25 years for graduate loans.
According to the Department of Education, “Several thousand borrowers with older loans will also receive forgiveness through IDR. More than 3.6 million borrowers will receive at least three years of additional credit toward IDR forgiveness.”
Saying “several thousand borrowers” and “at least three years of additional credit” is one of the biggest understatements in the history of the student loan program.
We believe the Department of Ed. is being extremely cautious about how much the program could save borrowers, in case draws legal opposition.
You should know as many as several million borrowers could receive complete cancellation thanks to the IDR waiver.
Until 2026, any cancellation is free from any federal taxation as well. A handful of states (perhaps four) could impose state income tax; so consult with a tax advisor about this aspect.
Could the IDR waiver be subject to legal challenge?
The 118th Congress was sworn in on January 3, 2023. The PSLF waiver didn't face resistance, legally. This could be in part due to sympathetic stories from service members shown on programs such as 60 Minutes, who were denied benefits under the program.
Most of the benefits of the IDR waiver will begin in 2023 under this new Congress.
Could the new Congress sue to block aspects of this program? They tried to retroactively take back benefits through a Congressional Review Act joint resolution, but that effort failed.
No other serious lawsuits blocked the PSLF Waiver. So, it stands to reason the IDR Waiver would be allowed to stand. As of July 2023, the waiver has existed for months without any serious challenges being levied.
We think borrowers with commercially held FFEL loans face the most legal risk, as a lawsuit from an investor or group of investors might block their access to this relief program.
Others can likely feel more secure knowing the PSLF waiver provided over $20 billion in benefits without succumbing to legal challenges.
Get the most out of the IDR Waiver for your situation
This IDR waiver could potentially accomplish a very large amount of debt cancellation. Some of that cancellation will be immediate. But much of it will also occur over the next several years, as borrowers hit their 10-, 20-, and 25-year forgiveness payment counts, depending on the program they're eligible for.
Many borrowers will see their accounts automatically updated with a one-time revision late this year or early next. The Department of Education will instruct student loan servicers to make this update to your account. But your application could be processed much sooner if you could obtain forgiveness under the IDR Waiver before then.
For example, if forbearance and deferment, along with your payments, puts you above the 120 months needed for the PSLF program, you could fill out the PSLF ECF form and check whether you qualify immediately.
You could follow a similar process for 20- or 25-year IDR forgiveness, but with only a consolidation.
Many borrowers will want to consolidate to get the full benefits of the IDR Waiver. But others who have low IDR payments locked in until 2024 or even 2025, thanks to the student loan pause extensions, should not take any action.
What's clear is that the IDR waiver creates a massive number of opportunities for borrowers to save money. But most are unaware of the possibilities for savings due to not understanding all the rules.
We can help optimize your loan repayment strategy under the IDR waiver if you want assistance. Feel free to use tips from this article as well to get the most forgiven under this IDR account adjustment temporary program. We might not see another opportunity like this for student loan borrowers for years to come.
FAQ
The IDR waiver applies to all borrowers with federal student loans, including individuals in both public- and private-sector jobs. The PSLF waiver, which ended on October 31, 2022, was exclusively designed for current or former public sector employees. However, borrowers pursuing PSLF can take advantage of the IDR waiver to get credit toward the 10-year eligibility requirement for loan forgiveness.
Any federal student loan borrower can qualify for the IDR waiver. Borrowers who may benefit from this one-time adjustment include those previously or currently on an IDR plan, those participating in the PSLF program, or those interested in an IDR plan with Direct or FFEL Program loans held by the U.S. Department of Education (ED).
Borrowers do not need to apply for the IDR waiver, as federal loan servicers will update accounts automatically later in 2023 and 2024. However, some borrowers may benefit from consolidating their student loans to greater benefit from the IDR waiver.
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Hi Travis, I benefited from the PSLF waiver which gave me 6 months of PSLF-eligible payment periods, but not across every loan. I was planning on consolidating the loans that did not get those months added to one of the loans that received an increase in count. With this new waiver, I have another 12 months (non-consecutive) that could be potentially counted (not across all loans again). FedLoan steered me into forbearance when I was able and willing to pay during a research year in med school (if I knew better about IDR plans). Should I hold off on consolidating to make it easier for ED to review my count or does it not really matter?
Does the 36 months of “aggregate” forbearance include credit for the 25 months in forbearance due to the COVID-19 payment pause? If so, this is an even bigger boon than it appears at first blush!
Hi Andrew, it seems like it will not, but we are waiting to confirm.
Hi Travis,
With the changes today and the potential counting of loans in forbearance even before consolidation towards forgiveness, will there be a potential tax bomb?
I have loans starting in 1984, went through years of repayment, deferment, forbearance for years, consolidated a few times, finally consolidated and entered PSLF in 2012. I’m hopefully optimistic the changes today may get my loans forgiven but I’m now concerned if they are forgiven using the 20 or 25 year timeframe, that they will be taxed. Any thoughts?
Thanks as always for the immediate writeup on current events, Lori Lee
Lori,
I’m not Travis by any means, but I read all of his student loan planner emails. I seem to remember reading there is no tax bomb for loans forgiven by 2025. Hope this helps relieve some of your anxiety.
Correct, no tax bomb until Dec 2025.
Hi Travis , how does the DOE distinguish the type of deferments before 2013 ? I had a mix of in in school and regular deferments. They all say DA , deferred . And is this counting toward PSLF ?
Hi Joann, in school will not count but other types will.
I was in residency forbearance for about 2 years, 2013-2015. Any indication of whether that will be counted? I don’t see wording from ED regarding the “mandatory” versus “discretionary” forbearance type.
Hi Nick, nothing yet we are waiting.
Hi Travis my daughter has completed all of the paperwork for the PSFL has had her loan since 2007 but they denied her IDR, this was about 2 months ago and she hasn’t heard anything since. She is and has been a public school teacher since 2007 and continues to make her payments but has taken advantage of the hold on the payments but she had to request it. We are totally confused about what the next step will be.
Thank you
Hi there, if you haven’t already you might consolidate and then reapply for the PSLF program at the same link. This is a case where we would recommend a consult with our team https://www.studentloanplanner.com/book.
Thanks for the info! I am waiting on my ECF to be processed for PSLF now that I was finally able to consolidate my FFELP loans knowing that the previous payments would count towards forgiveness. Even with the waiver I think I have only about 107/108 payments that qualify, until this new forbearance waiver was announced! With it I should have 150-160 months of payments when forbearances are added in. My biggest worry is that somehow the budget for the forgiveness will disappear before everything is processed. Have you heard anything about if the forbearance waiver will processed along side the PSLF waiver months or if they will be done separately? I’ve been employed full time in the same school district since January 2008 so I know the employment counts for it all.
Hi JJ, there’s no budget, it’s based on legal authority from the pandemic, if that gets invalidated then we assume everything would stop. But we expect changes will take at least a couple months.
Hi Student Loan Planner,
Have you heard anything on the ICR regulations. I was a parent plus parent and consolidated to get into the PSLF. I have heard nothing but IBR’s. Thanks
Hi Egan,
Currently there is a proposed new expanded income-contingent repayment plan (EICR). This proposal is expected to change between now and the final round of edits to the proposal, but it gives a clue as to what the Department is considering. Here is our article regarding this:
https://www.studentloanplanner.com/eicr-plan-overview/#Whats_different_about_the_Expanded_Income-Contingent_Repayment_Plan
Hello
Has the IDR waiver been blocked by court orders as Student Debt Relief program from President Biden?
Hi Arturo,
No the IDR waiver has not been blocked by courts.
Hi Travis,
I have 8 years in an Extended Graduated plan. Would it be wise to switch to a IDR plan?
Hi Katie,
Without knowing your exact situation and goals, we wouldn’t be able to determine what would be the best payment plan for you. If you would like to speak to one of our experts, I would recommend scheduling a consultation. This is exactly the kind of stuff we help with. We can show you the numbers behind which approach is best.
I have consolidated student loans owned by the government and also two FFEL loans owned by the government (they are not commercial…I have not paid on them during the pandemic pause). I’ve been paying IBR on all the loans since 2012, but had some deferrment before then also. Most of my loans are from law school. Do I need to consolidate the two government FFEL loans in order to receive the waiver and also to take part in a better repayment plan (e.g. Biden’s Plan)? If I do need to consolidate, do I need to consolidate the two FFEL in with the other conslidated loads, or just consolidate the two FFEL loans?
Hi Adam,
Any Direct Consolidation Loan qualifies for REPAYE. The earlier count could only be relevant if everything were consolidated. One consideration here is that any consolidation loan comprised of an FFEL loan that is/was commercially serviced will NOT qualify for the $10-20k cancellation announcement (assuming it perseveres in court). There are pros and cons to consider, if your biggest concern is earlier forgiveness, consolidation of newest and oldest loans together could make sense. Two separate consolidations would not have a timeline “shared” through the waiver.
Hi,
I have a Direct Consolidated Loan that has been in IDR since 2017. Concurrently, I also have a LDS loan (loan for disadvantaged students) through a different lender that is interest free. Under this new IDR waiver, if I were to consolidate my LDS loan to my Direct Loan for PSLF, would this reset my count to zero? Or does the count from 2017 continue? Thanks!
Hi Michael,
Any prior PSLF history on your Direct Loans can persist through consolidation given the waiver. It sounds like consolidation of your LDS loans and Direct Loans would give the most PSLF progress. Outside of the waiver, you would have reset to 0.
How will the IDR Waiver play out if you were in a repayment plan for undergraduate loans, then went to graduate school so loans went into forbearance, then graduated, consolidated and have been paying back loans for the past 12 years?
Hi Mary,
According to the student aid website “If you apply for consolidation before the end of 2023, the adjustment will count periods of repayment on your loans prior to the consolidation toward IDR forgiveness and (for eligible borrowers) PSLF.”
But it is important to take into consideration that time spent in in-school status or in school deferment does not count towards time in repayment. Therefore you time in repayment might be less than 12 years because of this. You can find more information regarding this on the Student Aid Website here: https://studentaid.gov/announcements-events/idr-account-adjustment
Hi Travis,
I’ve asked this question of my servicer and the DoE but not gotten any answer. I’ve spent most of the last 15 years working overseas which, due to tax treaties, gave me a US AGI of zero. As I understand it to mean that I was in repayment statud but owed no money due to IBR/IDR. Is that a correct interpretation?
Thanks!
Hi Deb,
Correct. In your situation, you should consolidate. Or if you would like to speak with someone 1-on-1 to discuss your specific situation further, then we do also offer consultations with our experts. You can schedule here: https://www.studentloanplanner.com/book
I consolildated my loans back in 2004. Why would I need to consolidate htem again?
Hi Deb,
I apologize and forgot to elaborate and add that we recommend consolidating if needed. Apologies once again.
Hi,
I am only about 17 payments away from PSLF, and am currently working for a qualified employer. I attended law school while working full time at a qualified employer (time before and after law school have already been counted from that employer). Do I have any recourse in regards to that four year period of law school not counting towards my PSLF? It’s frustrating because I’ve been in public service my whole career, but because it’s an in school deferment it does not count. Even though I was making a minimal salary, and probably would have qualified for almost zero dollar payments in that time.
Thank you for all of your continued information, and diligence with this matter.
Hi Ryan,
Unfortunately, there is not much that can be done about this because you were in an in-school deferment, therefore as they stated that time would not count towards PSLF.
Hi there,
Trying to confirm if I’m reading this correctly… If a person had a consolidated subsidized direct loan from undergraduate years with repayment start date in 2009 AND several separate direct stafford loans from graduate school with repayment start date in 2015, does that mean consolidating the graduate loans with the undergraduate loan would allow the count for all loans to start in 2009?
Thanks! Always appreciate the material and emails from SLP.
Hi Rebekah,
Yes, that time in repayment starting in 2009 should be applied to your new consolidated loan. You can find this on the official FAQ and IDR Waiver Guidance on the Student Aid website “If you apply for consolidation before the end of 2023, the adjustment will count periods of repayment on your loans prior to the consolidation toward IDR forgiveness and (for eligible borrowers) PSLF.”
Does this count toward private and federal loans, MarciaMcgregory
Hi Marcia,
Unfortunately, only federal loans qualify for the IDR waiver.
The email from Travis states, “And the IDR Waiver applies to BOTH private sector AND public sector borrowers.” Can you clarify what loans are “private sector?” For example, I had FFEL loans that we consolidated through a private consolidation loan with Discover Student Loans. Would these be included in this waiver if added to my current Direct loans?
Hi Sara,
In the newsletter, this section was in terms of employment. Whereas the PSLF waiver could only be helpful for people working at qualifying employers, the IDR waiver can help those seeking PSLF as well as those who have just been on an IDR plan for a long time and are going for 20 or 25 year forgiveness, regardless of their employer.
Regarding your loans, they would have to be federal loans to qualify for the IDR Waiver and PSLF.
Hello,
I consolidated several FFEL loans back in 2006. Before I did that, my oldest FFEL loan was taken out in 2001. Would I get credit based on the old FFEL loan prior to consolidation, or the consolidated FFEL starting in 2006?
Thanks!
Hello . Hope everyone is well and safe.
Will the forbearances and payments from our original Parent Plus loans still count towards the IDR waiver one-time account adjustment after using the double consolidation loophole? In other words could the double consolidation loophole eliminate or negatively affect our IDR waiver one-time account adjustment?
Thanks Jean.
Hi Jean,
According to the student aid website’s official IDR Waiver FAQ ” Parent PLUS borrowers who consolidate those loans with their non-PLUS student loans will be credited based on the time in repayment for all of their loans. This ensures borrowers receive the maximum possible credit toward IDR forgiveness under the program.”
Here is the link where you can find this information on the student aid website: https://studentaid.gov/announcements-events/idr-account-adjustment
Hi,
I applied and was accepted into the PSLF program last year but never consolidated my loans because it is so confusing. I was worried I might lose my logged payments if I consolidate. I have 95 payments so far logged on an income repayment plan, but my two loans are with AES and I have had to make payments on them through the whole payment pause because they are commercially held loans. (I also have newer parents plus loans as well that I took out to help my daughter who is in college). Should I be consolidating my loans? If I do will I have to start my payments at zero again to get to the 120? If I don’t consolidate does that mean I won’t qualify for the 120 payments benefit for forgiveness? Ugh. So much to weigh and I don’t want to mess up my options. My loans are from back in 2005 and before that even. I refinanced them again in 2008 so the two loans have been in repayment since 2008 with AES but many years of forbearance and deferment even before that due to hardship. Do you recommend I consolidate them now and what would that do to my 95 payments made on the IBR payments I have made to AES so far?
Hi Wendy,
With regards to your question, if you were to consolidate you loans under the IDR waiver the adjusted payment count with include periods of repayment on your loans before you consolidation this loan toward IDR forgiveness and (for eligible borrowers) PSLF.
Now whether you should consolidate will depend on your specific situation and other factors. If you would like to speak with someone 1-on-1 to discuss your specific situation, then we do also offer consultations with our experts. You can schedule here: https://www.studentloanplanner.com/book
Ok I will look into consulting but the fee might be too expensive for me. Do I have to fill something out to qualify for IDR like I did for PSLF? Thanks for your input
Hi Wendy,
You just need to make sure you are in an IDR plan in order to qualify for the IDR waiver.
“One minor IDR Waiver caveat for PSLF borrowers
There’s one minor limiting factor about the IDR Waiver that I can find, and it only affects public sector borrowers. To receive total forgiveness for PSLF under the IDR waiver rules, you must be working for a qualifying employer when the Department of Education makes the IDR Account Adjustment to your forgiveness credit.
The PSLF Waiver didn’t require you to work for a qualifying employer when they wiped your debt, so that’s slightly less generous.”
I am currently employed in a non for profit educational agency and have worked 5 years so far toward PSLF. I was thinking of working in the private sector, not for a qualifying employer starting September, as the rates are higher and i need the funds. I may return to the non-profit sector at a later date to complete the PSLF. If the Dept of Education makes the IDR account adjustment to my forgiveness credit while i am working for a non qualifying employer, then i will get nothing?
Hi Chaim,
Yes, from our understanding you would need to be currently employed with a qualifying employer in order for those past payments to be counted towards the PSLF forgiveness program under the IDR waiver. It is definitely still worth a try to apply for PSLF and see if it is processed in time.
With that said if you decide to work in the public sector then you can still consider going towards forgiveness through an IDR plan though it will take 20 or 25 years depending on the repayment plan.
Hello,
The article above mentions that borrowers pursuing PSLF can take advantage of the IDR waiver to get credit toward the 10-year eligibility period required for loan forgiveness.
I am confused how the IDR waiver is different from the PSLF waiver?
For the IDR waiver if you were in deferment/forbearance but not working for an approved employer will it still count towards the 120 payments for PSLF?
Thank you,
Tejas
Is there anyway to be Eligible for paye thru consolidation if some of your loans are from before 2007?
Hi Mas,
Unfortunately, no it wouldn’t be possible to be eligible for PAYE through consolidation.
What about borrowers with only ONE commercially held FFEL consolidation loan? Per the new FAQs, they cannot consolidate again into a direct consolidation loan unless one of three exceptions apply. What if none of the exceptions apply? Are these exceptions being strictly enforced? Thanks!
Hi CJ,
These exceptions for consolidating single FFEL loans are new and as of right now we are not sure how strictly they are enforcing it. Once we get more information we will be sure to update.
Hi, Im understanding that to qualify for the IDR WAIVER for commercial ffelp loans I need to consolidate. Do I need to fill out and application? If so, what is it that protects me from my loans starting over and where does it legally show that I will be under the waiver and doesn’t show up as just consolidating- then being under all of their stipulations. Im very concerned about the promissory note that they want u to sign. My loans were originally consolidated in 2000. So its time for some relief. Also how did my loans become commercial, I was originally with Sallie Mae- now Navient.
Thank you,
Yvonne
Hi Yvonne,
Yes if you have commercially held FFEl loans, then you would need to apply for a Direct Consolidation Loan by the end of 2023. Information on what happens after loan consolidation and how that affects payment count is located under the IDR waiver FAQ/ Guidelines on the student aid website:
” If you apply for consolidation before the end of 2023, the adjustment will count periods of repayment on your loans prior to the consolidation toward IDR forgiveness and (for eligible borrowers) PSLF.
This differs from the earlier approach, in which consolidating your Direct Loans would reset your payment count to zero. After the IDR adjustment has been applied to all borrower accounts in 2024, accounts will be treated in accordance with the regulations in place at that time.
If you recently consolidated your loans, your count of eligible and qualifying payments for both IDR and PSLF will temporarily reset to zero, but we will continue to forgive accounts that reach the IDR forgiveness milestones. But don’t worry—if you don’t reach forgiveness when you consolidate, we will update your account to show the full payments credited under the adjustment in 2024.”
Here is the link where you can find this information:
https://studentaid.gov/announcements-events/idr-account-adjustment#frequently-asked-questions
Hope this helps.
I have 200K, original loans 100K in direct consolidated subsidized and unsubsidized loans. I have 28 loans with oldest origination date 01/22/1996. I have undergraduate and graduate loans. My oldest loan repayment begin date is 11/28/2000. These loans have been consolidated 3 times with the most recent consolidation on 5/5/2006. I have basically been in deferment, forbearance or hardship no pay the whole time. Now I am anxious to see what can be credited from IDR adjustment?
1. Is the IDR adjustment a sure thing, does it require approval still? Is there risk of change in policy or lack of funding before credit?
2. How do I calculate my forgiveness months credit from the my aid file downloaded?
2. How do I calculate credit for deferment and forbearance? Can I get credit for more than 12 or 36 months, since I have been in constant forbearance or deferment since 2000? Is there a max credit for deferment or forbearance? If consolidated after deferments or forbearances do I still get credit?
3. Are undergraduate loan in repayment dates counted if consolidated/ combined with later date graduate loans in repayment dates? Is the oldest undergraduate date counted for credit calculation?
4. If bankruptcy didn’t involve student loans do the payment statuses still count towards credit?
Thank you so much,
Hi Bill,
Thanks for reaching out! We would love to help.
1. The bill for the IDR waiver has passed and is in effect at the moment.
2.You can do it manually, but it would be painstaking to do it on your own, the FSA is implementing an IDR tracker for this sometime in 2024
2.There is no maximum amount, the minimum amount is 12 consecutive months or 36 aggregate months. If you have more than 36 months in forbearance you will get that amount credited to your account as if they were months in repayment automatically.
3.Yes, any payments made in the past before consolidation will be added to your payment count as of the IDR waiver states.
4.I’m not quite sure what the question is asking. Sorry about that
I have $50K in an undergraduate direct loan consolidation where the earliest loan went into repayment on 11/2003. I have $70K of various unconsolidated graduate loans, also direct loans, that all went into repayment in 12/2015. I am debating if I should consolidate all of my undergraduate and graduate loans so that all of them will be eligible for the one time IDR adjustment with the count starting back in 11/2003. That being said, I think the undergraduate loans will be eligible for forgiveness in 11/2023 (20 years) if I don’t consolidate with my graduate loans. But if I consolidate with my graduate loans, I will have to pay on my loans until 11/2028 (25 years). Is that correct or are there any other options to get forgiveness after 20 years with graduate loans?
Hi Dan,
Most plans under IDR including those for graduates are 25 years for forgiveness. Based on the information you provided I think you would benefit from having us create a custom plan for you.
This is exactly the kind of stuff we help with. We can show you the numbers behind which approach is best. You can book using this link: https://www.studentloanplanner.com/book
Unfortunately consolidated all of my loans to Navirefi 2 years ago at a low interest rate and they say these will not be eligible for any debt cancelation 🙁
Hi Jason,
Are these loans private or Federal? Private loans would not qualify for the IDR Waiver, but if they are federal that may open up other options.