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A once-off payment count adjustment to be applied to specific student loans has been announced by the U.S. Department of Education. The initiative targets income-driven repayment and Public Service Loan Forgiveness (PSLF) programs but action by borrowers may be needed before April 30, 2024.
The adjustment to eligible loans could pave the way for borrowers to have their loans forgiven according to the Oregon Division of Financial Regulation (DFR) bulletin that was released in February.
Oregon’s student loan ombud, Lane Thompson, emphasized that information regarding the once-off account adjustment and its deadlines needed to be shared with current loan servicers. He confirmed that although most borrowers will not need to take any action to benefit from the adjustment, certain loan types- specifically those not owned by the Department of Education, namely Federal Family Education Loans (FFELs) and Perkins Loans, necessitate consolidation to become eligible.
Student Loans That Qualify Under The Forgiveness Program
The DFR sets out details of the program and indicates that the adjustment would primarily affect government-owned FFEL borrowers and Federal Direct Loans where borrowers are actively pursuing forgiveness through their payment plans or the PSLF program. Certain conditions apply.
Loans in repayment for a minimum of 20 years for undergraduate loans and 25 years for graduate loans are covered by the adjustment and are eligible for forgiveness. The DFR bulletin said that all qualifying loans will see updates in their payment counts as allocations are made towards forgiveness goals.
Critically, it must be noted that commercially owned FFELs and Perkins Loans are not automatically covered by this adjustment. To benefit from the one-time adjustment, borrowers must consolidate commercial loans into Federal Direct Loans by the deadline set at April 30, 2024.
Action To Take To Access Department Of Education Forgiveness Program
Borrowers wanting to access this one-time opportunity must take proactive steps by visiting the student loan consolidation website to initiate the consolidation process into Direct Loans before the April 30 deadline. The Department of Education’s Federal Student Aid website can be accessed here.
The U.S. Department of Education’s initiative is a significant step towards giving relief to borrowers struggling with student loan debt. As a potential pathway to loan forgiveness for qualifying borrowers, the Oregon Division of Financial Regulation encourages borrowers to take timely action to maximize the benefits available through this once-off adjustment. Borrowers are urged to take note that the deadline is approaching.
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