Don't miss the April 30, 2024, deadline!

Wait...what are you talking about?

The April 30, 2024, deadline is for the Income-Driven Repayment (IDR) Account Adjustment. It is a huge opportunity for federal student loan borrowers to get credit toward Public Service Loan Forgiveness (PSLF) on past payments that wouldn't ordinarily count. It's the Department of Education's attempt to make up for past wrongs, including a lack of payment tracking, inaccurate information, and abysmal (and sometimes downright harmful) support from student loan servicers.

Who does this impact?

It impacts two groups of loan borrowers who are pursuing (or want to pursue) the Public Service Loan Forgiveness (PSLF) program:

1. FFEL loan borrowers
2. Direct loan borrowers who have separate loans with different PSLF-qualifying payment counts

If you aren't sure what type of federal student loans you have, watch my 2-minute tutorial. 

Regardless of which group you're part of, you must take action before April 30, 2024! I describe this in greater detail below.

FFEL Loan Borrowers

FFEL loans are not eligible for PSLF; only Direct loans are eligible. To convert FFEL loans into Direct loans, you must consolidate them via studentaid.gov. By consolidating your FFEL loans, you will convert them into Direct loans, making them eligible for forgiveness through PSLF.

Usually, when a borrower consolidates their loans, the PSLF clock starts again at 0 since it creates a new loan. But thanks to the IDR Account Adjustment in effect until April 30, 2024, FFEL loan borrowers can consolidate them AND get credit for past payments made on their FFEL loans, WITHOUT restarting the PSLF clock! This is HUGE! 

If FFEL loan borrowers wait to consolidate their loans until after April 30th, they will not receive any credit toward PSLF for past payments. The thought of this happening to borrowers keeps me up at night!

Direct Loan Borrowers With Different PSLF Payment Counts

Borrowers will sometimes have a handful of Direct student loans with different PSLF payment counts. I usually see this when someone has loans from multiple degrees (an undergraduate and graduate degree, for example) and spent time working at a PSLF-qualifying employer before, between, and/or after them.

The IDR Account Adjustment is a golden opportunity for this borrower to consolidate their federal student loans before April 30, 2024. The resulting new Federal Direct Consolidation loan will be given the highest PSLF payment count of all the underlying loans they consolidated. I've seen this wipe YEARS off my clients' PSLF repayment timelines! 

If these borrowers wait to consolidate their loans until after April 30th, the resulting Federal Direct Consolidation loan will be given the weighted average PSLF payment count of all the underlying loans they consolidated.

After consolidating, verify all periods of PSLF-eligible employment

Once borrowers consolidate, they should use the PSLF Help Tool to verify PSLF-eligible employment dating back to October 2, 2007, if they haven't already. The form will then be sent electronically to employers (past and current, as applicable) for them to sign off on. The form is then routed to Mohela for processing (which will likely take months).