Student Loan Consolidation Deadline: Apply by April 30 for Accelerated Debt Forgiveness
For those with multiple student loans, consolidating these loans by April 30th could present an opportunity to accelerate debt forgiveness. The Biden administration’s temporary policy allows borrowers to combine their federal student loans into one new loan and receive payment credit based on the timeline for the loan with the longest repayment history. This can significantly reduce the waiting period for forgiveness, especially for those who have been making payments for extended periods.
Benefits of Consolidating Before May 1st
For instance, a borrower who graduated college in 2004 and took out additional loans for a graduate degree in 2018 could qualify for forgiveness on all their loans sooner by consolidating before May 1st. Under a 20-year income-driven repayment plan, they might typically have to wait another 14 years for full relief. However, consolidating loans allows them to apply the payment history of their oldest loan, potentially qualifying them for forgiveness much earlier.
Eligibility and Application Process
All federal student loans, including Federal Family Education Loans, Parent Plus loans, and Perkins Loans, are eligible for consolidation. Applications can be submitted at StudentAid.gov or through loan servicers. As long as applications are submitted by April 30th, they will be processed even if there are delays.
Considerations Before Consolidating
Before consolidating, it’s essential to gather a complete payment history for each loan. This ensures accurate credit for payments made. Borrowers should also note that consolidating loans does not increase their monthly payment under income-driven repayment plans, as the payment amount is based on earnings rather than total debt.
If you believe there are issues with your payment count, contact your loan servicer or submit a complaint to the Department of Education’s Federal Student Aid unit. By taking advantage of this temporary policy and consolidating loans before the April 30th deadline, borrowers with multiple student loans can potentially accelerate their path to debt forgiveness.
