The Biden administration has announced updates to the IDR Account Adjustment program, which provides retroactive credit towards student loan forgiveness milestones for borrowers on income-driven repayment plans and Public Service Loan Forgiveness. The program aims to address historical failures in administering student loans and has already approved $44 billion in debt relief for over 900,000 borrowers. One major update is an extension of the deadline to consolidate loans via the federal Direct loan program to qualify for the account adjustment. The Education Department plans to run the adjustment monthly or semi-monthly and expects to complete the adjustment by July 2024. Borrowers will be able to track their progress towards forgiveness through an online tool by the end of 2024.
The Education Department has extended the deadline for student loan borrowers with FFEL loans to consolidate into the federal direct loan program in order to benefit from a one-time account adjustment. The new deadline is April 30, 2024. Borrowers with federal loans managed by the Education Department do not need to take any action to benefit from the adjustment. The account adjustments have already provided debt cancellation to thousands of borrowers, and by July 2024, all borrowers will receive updated payment counts to ensure accurate progress towards forgiveness. The Education Department is also implementing measures to protect vulnerable borrowers, including a 12-month "on-ramp" period and the development of a new student-debt relief plan.
The Biden administration's IDR Account Adjustment initiative will result in accelerated student loan forgiveness for many borrowers. The Education Department has released new guidance that expands eligible loan periods that can count toward loan forgiveness, including Parent PLUS loans and recent default periods. Consolidation can also accelerate student loan forgiveness. The IDR Account Adjustment will be implemented automatically for borrowers with government-held federal student loans, and discharges are expected to begin later this year. House Republicans are moving forward with plans to repeal several Biden administration student loan forgiveness initiatives.
