Student loan borrowers with cert෴ain discontinued student loans now have more time to consolidate their debt to take advantage of a program that giv🐽es them extra credit toward full forgiveness.

Borrowers now must consolidate their loans by June 30 to gain elဣigibility for a one-time account adjustment scheduled to take effect in September.

The Department of Education extended the deadline this week🅠, as the process has already resulted in forgiveness for nearly 1 million borrowers, the 🍎department said.

Why 💟the Government is Asking Borrowers To Consolidate Th🐭eir Student Loans

During the administration of President Joe Biden, the Department of Education changed the rules of student loan repayment dramatically in favor of borrowers. The changes have often resulted in people owing less than they did before, with 4.3 million people receiving $153 billion in loan forgivene🌠ss as of April. 

Crucially, those changes only affect loans that are owed to the federal government, not to private lenders, meaning that many borrowers will have to consolidate their loans in order to be eligible. 

Today, most students who get student loans borrow directly from the federal government through a program called 澳洲幸运5官方开奖结果体彩网:Direct Loan, making them subject to any student loan relief the government decides to offer. Others borrow from private lenders that have nothing to do with the federal government, making them ineligible for any forgiveness.

Years ago, the situation was more mixed: Students borrowed from commercial lenders, whose loans were guaranteed by the federal government through a program called Family Federal Education Loans (FFEL), which was discontinued in 2010. As of the second quarter of 2024, 7.8 million people still had those older FFEL loans, most of them through commercial lenders, versus 37.9 million with Direct Loans, according to data from the Department of Education. 

Those millions of FFEL borrowers were given a strong reason to consolidate their loans into federal ones when the Department of Education began a program with a mouthful of a title but a simple takeaway. The Payment Count Adjustments Toward Income-Driven Repayment and Public Service Loan Forgiveness Programs will result in an estimated 3.6 million people having their loans forgiven or making progress toward forgiveness, but only those with Direct Loans.

Consolidated Lꦗoans Play Into Revamped Repayment Plans

The payment count adjustment mentioned above has to do with income-driven repayment plans. In income-driven repayment plans (IDRs), borrowers’ monthly payments are based on how much money they make, not on how much they owe. After paying a certain percentage of their income for 20 or 25 years (depending on the specific IDR program and kind of schooling the loan was for), borrowers with IDR plans have any remaining balance forgiven. On an IDR plan, every month you pay your bill is counted and puts you one step closer toward having your loan wiped out.

A related program, Public Service Loan Forgiveness (PSLF), similarly requires income-based payments, and offers forgiveness after 10 years (in other words, 120 monthly payments) for people who work for government or nonprofit organizations. 

In 2022, the Department of Education began going through borrowers’ accounts to correct mistakes made by the companies that administer student loans on behalf of the government. In some cases, companies had improperly put borrowers into forbearance, pausing their payments and their progress towards forgiveness.

To correct those errors, the ꧑department is revising payment counts to give borrowers up to three years worth of credit for the time their loans were in forbearance, and in several other situations.  

To be eligible for this extra credit, borrowers have to consolidate their loans—combining multiple loans into one and transferring it to the federal government, before June 30. Normally, consolidation resets the clock on income-driven repayment plans and wipes out any progress toward forgiveness. However, during the payment adjustment, all past payments will count.

How Do I Consolidate My Student Loans?

To consolidate your student loans for extra credit under this new program, you'll need your personal information, including your Social Security number, address, and contact information. You'll also need two references.

First, to💜 check if your loans are the FFEL type, l𒆙og onto . If you navigate to the "My Aide" chart after you log in, click "view details" and scroll to the "Loan Types" section of the page, you can select the drop-down that will show you a list of all your loans, the total you have in each and the type of loan it is.

Once you confirm your loan is an FFEL, you can go to ꦆthe and fill out your personal information. If you are eligible for the PSLF, make sure to ✱mark that you have or will apply. Otherwise, to qualify for the program, you must sign up for an income-driven repayment plan.

The application will also reওquire two references. The references will not be responsible for paying the loꦛan.

Elizabeth Guevara contributed to this report.