Saturday, October 8, 2022

How to See if You’re Eligible for Temporary Forgiveness Initiatives

Hello everyone!!!  I certainly hope you are well.  I hope you all have settled in comfortably in the Fall Semester.

Quickly, I'd like to make you aware of two temporary initiatives announced by the U.S. Department of Education’s office of Federal Student Aid (FSA) that could get you closer to student loan forgiveness:

  1. A limited Public Service Loan Forgiveness (PSLF) waiver. Under the waiver, you could qualify to receive credit for additional past periods of repayment.
  2. An account adjustment to Income-Driven Repayment (IDR) Plans. As a result of this adjustment, you may reach IDR forgiveness sooner.

If your loan account(s) start with a “D” or “J”, this means you have Federal Family Education Loan (FFEL) Program loans held by a commercial lender(s). To take advantage of the benefits offered under these new initiatives, you’ll need to consolidate your loans into the Direct Loan Program by a specified date. Please refer to the details of each initiative below.

Want to confirm your loan types? You can log in to FSA’s Aid Summary using your FSA ID to find out how many and what types of federal student loans you have.

1. Limited PSLF Waiver

On October 6, 2021, FSA announced a temporary period during which qualifying borrowers who worked for qualifying public service employers may receive credit for past periods of repayment on loans that would otherwise not qualify for PSLF. These past periods will now count whether or not you made a payment, made that payment on time, for the full amount due, or on a qualifying repayment plan.

Borrowers with FFEL Program loans, Perkins loans, or other federal student loans will need to consolidate into the Direct Loan Program and apply for PSLF by the date the waiver ends, which has been announced as October 31, 2022.

For more information, including how to apply for PSLF using FSA’s PSLF Help Tool, review FSA’s webpage on the limited PSLF waiver.

2. Income-Driven Repayment (IDR) Account Adjustments

On April 19, 2022, FSA announced several changes related to IDR Plans that include an upcoming one-time increase to IDR-qualifying payment counts. This will allow some borrowers to qualify for IDR forgiveness sooner rather than later. Other borrowers not currently enrolled in an IDR Plan who have accumulated time in repayment for at least 20 or 25 years may also qualify for forgiveness as a result of these changes.

If your loan account starts with a “D” or “J”, you have FFEL Program loans held by a commercial lender(s). To take advantage of these changes, you’ll need to consolidate into the Direct Loan Program before FSA completes implementation of these changes (which is expected to be no sooner than January 1, 2023).

For more information about this initiative, review FSA’s announcement.

Call Your Lender to Discuss Consolidation

They will be happy to discuss the considerations of applying for a Direct Consolidation Loan and whether doing so would allow you to benefit under these new initiatives. They can also guide you through the online consolidation process.

Beware of Scams

Borrowers have reported hearing from so-called student debt relief companies offering assistance with these new initiatives – for a fee. You should not have to pay for assistance your loan servicer provides guidance for free. Call them instead!

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