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Miguel Cardona speaks after being introduced at The Queen Theater in Wilmington, Del., Wednesday, … [+]<\/span> Dec. 23, 2020. (AP Photo\/Carolyn Kaster)<\/span><\/p>\n <\/fbs-accordion>Copyright 2020 The Associated Press. All rights reserved<\/small><\/figcaption><\/figure>\n The Education Department has updated formal guidance that appears to expand eligibility for a key, one-time federal student loan forgiveness<\/a> and relief initiative that could benefit Parent PLUS borrowers.<\/p>\n Here are the details.<\/p>\n Last year, the Biden administration announced<\/a> the IDR Account Adjustment, a one-time fix that will allow the Education Department to provide retroactive credit towards student loan forgiveness under Income Driven Repayment (IDR) plans.<\/p>\n IDR plans allow federal student loan borrowers to repay their loans according to formulas applied to their income and family size. After 20 or 25 years in an IDR plan (depending on the specific program), any remaining balance would be forgiven, although that loan forgiveness could be taxable.<\/p>\n Under the original IDR program rules, only time spent in an IDR plan counts towards a borrower\u2019s repayment and loan forgiveness term. Most periods of non-payment, such as deferments and forbearances, don\u2019t count, and loan consolidation can reset the clock. Many borrowers were not aware of this, and consumer advocates have long accused student loan servicers of improperly steering borrowers into costly forbearances or not properly tracking borrowers\u2019 progress towards IDR loan forgiveness.<\/p>\n In response to these issues, the Biden administration is rolling out the IDR Account Adjustment. \u201cI\u2019m incredibly proud [of] the Biden-Harris team\u2019s temporary changes\u201d to key federal student loan forgiveness programs to improve access, said U.S. Secretary of Education Miguel Cardona last October.<\/p>\n Under the initiative, the Education Department \u201cwill conduct a one-time account adjustment to borrower accounts that will count time toward IDR forgiveness,\u201d including the following periods:<\/p>\n According to<\/a> Education Department guidance, \u201cAny borrower with loans that have accumulated time in repayment of at least 20 or 25 years [under the IDR Account Adjustment] will see automatic forgiveness, even if you are not currently on an IDR plan.\u201d Another three to four million borrowers will advance their progress towards eventual student loan forgiveness by several years as a result of the one-time adjustment.<\/p>\n Direct loan borrowers will see the adjustments automatically by July of 2023. Non-Direct loan borrowers, including FFELP borrowers, \u201cshould apply for a Direct Consolidation Loan by May 1, 2023, to get the full benefits of the one-time account adjustment,\u201d according to the Education Department.<\/p>\n Borrowers working in public service careers (i.e., for certain nonprofit and public organizations) may also receive credit towards Public Service Loan Forgiveness (PSLF) under the adjustment.<\/p>\n Last month, the Education Department updated its published guidance on the IDR Account Adjustment to indicate that federal Parent PLUS borrowers on track for PSLF can also benefit from this initiative. Parent PLUS loans are a type of federal student loan issued to the parent of the undergraduate student. The parent, not the student or child, is the borrower for this type of loan.<\/p>\n \u201cThese changes will be applied automatically to all PSLF-eligible Direct Loans, including consolidated and unconsolidated parent PLUS loans,\u201d says the updated guidance. This is a significant update, because unconsolidated Parent PLUS loans have typically not<\/em> been eligible to easily receive much PSLF credit or any IDR credit, as they are not eligible for IDR plans (which, along with the 10-year Standard plan, are the only PSLF-eligible repayment plans). Even the Limited PSLF Waiver, which ended last October, did not significantly benefit unconsolidated Parent PLUS loans. Parent PLUS loans can access IDR, and thus more easily access PSLF, if they are consolidated into a federal Direct consolidation loan, but time spent in repayment prior to Direct loan consolidation has historically not counted towards loan forgiveness for these borrowers.<\/p>\n \u201cIf you believe you might benefit, you should update your employment certification history to reflect all periods of public service employment,\u201d advises the Education Department. Borrowers can start the process by using the online PSLF Help Tool<\/a>.<\/p>\n Parent PLUS borrowers may still need to consolidate their loans via the Direct consolidation loan program, and apply for an IDR plan, in order to make continued progress towards student loan forgiveness beyond the credit received through the IDR Account Adjustment\u2019s implementation. Currently, the only available IDR plan for consolidated Parent PLUS loans is Income Contingent Repayment (ICR), the most expensive IDR option. The Biden administration is developing a new, potentially more affordable IDR plan<\/a>, but it is not yet clear if Parent PLUS borrowers would be eligible. More details should be released in the coming months.<\/p>\n Borrowers should carefully review the Education Department\u2019s current guidance<\/a> on the IDR Account Adjustment before taking action.<\/p>\n This article has been updated to more accurately describe Parent PLUS eligibility for PSLF. <\/em><\/p>\n Student Loan Forgiveness Could Be Big In 2023: Here\u2019s What To Expect<\/a><\/p>\n The Student Loan Pause Is Actually Leading To Loan Forgiveness \u2014 Are Further Extensions Coming?<\/a><\/p>\n Supreme Court Takes Next Big Step In Student Loan Forgiveness Cases<\/a><\/p>\n 23,000 Student Loan Borrowers Will Get $19 Million To Resolve Debt Relief Fraud Claims<\/a><\/p>\n<\/div>\n\n Miguel Cardona speaks after being introduced at The Queen Theater in Wilmington, Del., Wednesday, … [+] Dec. 23, 2020. (AP Photo\/Carolyn Kaster) Copyright 2020 The Associated Press. All rights reserved The Education Department has updated formal guidance that appears to expand eligibility for a key, one-time federal student loan forgiveness and relief initiative that could …<\/p>\n","protected":false},"author":1,"featured_media":42349,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[161],"tags":[],"_links":{"self":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts\/42348"}],"collection":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/comments?post=42348"}],"version-history":[{"count":0,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/posts\/42348\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/media\/42349"}],"wp:attachment":[{"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/media?parent=42348"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/categories?post=42348"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.brandon.ddtest.info\/multisite-test\/wp-json\/wp\/v2\/tags?post=42348"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Biden Administration\u2019s IDR Account Adjustment Will Lead to Student Loan Forgiveness<\/strong><\/h2>\n
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Updated IDR Account Adjustment Guidance Good News for Parent PLUS Borrowers<\/h2>\n
Further Student Loan Forgiveness Reading<\/strong><\/h2>\n
Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"