The Biden administration has set a crucial deadline for student loan borrowers looking for forgiveness. By consolidating multiple federal student loans by April 30, borrowers can simplify their loans into one larger loan, which could make them eligible for the U.S. Department of Education’s revamped income-driven repayment plans. These changes have resulted in over 930,000 individuals receiving debt cancellation and $45 billion in relief. According to higher education expert Mark Kantrowitz, consolidating loans can significantly improve the chances of qualifying for student loan forgiveness.

Income-driven repayment plans, which have been in existence since 1994, calculate borrowers’ monthly payments based on a percentage of their discretionary income. Typically, these payments are lower compared to the standard repayment plan and can even be zero under certain circumstances. Remaining debt is usually forgiven after 10, 20, or 25 years, depending on the specific repayment plan. One of the challenges faced by borrowers enrolled in these programs is the presence of multiple loans acquired at different times, resulting in varying forgiveness timelines for each loan.

Currently, the Biden administration is offering borrowers a temporary opportunity to consolidate their loans and receive credit retroactively to the oldest loan included in the consolidation. This means that borrowers can potentially qualify for forgiveness on all their loans immediately upon consolidation. While consolidating loans under normal circumstances may reset the forgiveness timeline, the current program detail alteration by the Biden administration is in effect until April 30.

All federal student loans, including Federal Family Education Loans, Parent Plus loans, and Perkins Loans, are eligible for consolidation. Borrowers can apply for a Direct Consolidation Loan through or their loan servicer. Even if the processing of the application takes longer, submitting it by April 30 ensures eligibility. Some borrowers with minimal loan amounts may qualify for cancellation after just 10 years of payments by enrolling in the new income-driven repayment option known as the SAVE plan.

Consolidating loans should not result in an increase in monthly payments since repayment under an income-driven plan is based on the borrower’s income rather than total debt. The new interest rate after consolidation will be a weighted average of the rates on the existing loans. Before consolidating, it is advisable to obtain a complete payment history for each loan to ensure that all entitled credits are received.

Getting a comprehensive payment history of each loan is crucial as it determines when the loans first entered repayment, not when they were borrowed. This information can be obtained from or by requesting it from the loan servicer. In case of discrepancies in the payment count, borrowers can reach out to their servicer or lodge a complaint with the Department of Education’s Federal Student Aid unit.


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