On your StudentAid.gov dashboard: Log in and go to "My Aid" on your dashboard. Look for the PSLF progress section. It will display your current qualifying payment count. However, keep in mind this number only updates when you submit a new ECF.

Important note: Due to a recent payment count adjustment, there may be updates to your PSLF credits by September 1st, 2024. You don't need to do anything for this adjustment to be applied.

Call to Action:

• Request a free discovery call with a trusted SLD partner: Click Here
• Stay In Touch with SLD: Click Here
• Register for an upcoming student loan mentorship information session: Click Here

  •  Review and Credit for Non-Qualifying Months: The IDR adjustment allows the Department of Education (ED) to review borrowers' accounts and credit months that previously did not qualify towards IDR forgiveness. This is a significant benefit for those in repayment for at least 20 years.

  •  Exclusions and Consolidation Requirement: Borrowers with commercially held (private) Perkins Loans, FFEL loans, or HEAL Programs must consolidate their loans to be eligible for the IDR adjustment review by ED. These loans do not automatically qualify under the new adjustment rules.

  •  Temporary Rule on Consolidation: Normally, consolidating loans resets the repayment count to zero. However, under the updated temporary rules, borrowers can consolidate without losing their repayment history. They will receive credit for repayments and certain periods of forbearance and deferment back to their initial repayment start date.

  •  Extended Deadline for Consolidation: The deadline for loan consolidation to benefit from the full IDR payment count has been extended to June 30, 2024, as announced by ED in December 2023. This extension provides borrowers more time to take advantage of the IDR adjustment.

  •  Impact on PSLF Track: The IDR Adjustment will also benefit borrowers on the Public Service Loan Forgiveness (PSLF) track by increasing their payment count. This is done by crediting certain months of forbearance and deferment, aiding in quicker loan forgiveness for those in public service.

Sign up for a consultation with a SLD coach to see if you qualify for the IDR Adjustment: Click Here

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Episode Highlights:

  1  Introducing the SAVE Plan:

  ◦  President Joe Biden debuted the SAVE plan last fall, hailed as the most affordable and beneficial income-driven repayment plan.

  ◦  Key features include lower monthly payments, an interest subsidy to prevent balance increases, and accelerated forgiveness for small debt amounts.

  2  Major Updates Effective July 1:

  ◦  New repayment formula slashes monthly payments for undergraduate borrowers by half, reducing the discretionary income formula from 10% to 5%.

  ◦  Graduate loan borrowers with undergraduate debt will also see payment reductions proportional to their combined debt.

  3  Student Loan Payments Paused for July:

  ◦  Over 8 million borrowers enrolled in SAVE will have payments recalculated.

  ◦  To avoid chaos, the Education Department has placed impacted borrowers in administrative forbearance for July, cancelling any due payments.

  4  Forbearance Notices and Interest Rate Benefits:

  ◦  Borrowers are receiving notices about the administrative forbearance from July 1 to July 31.

  ◦  No payments required and interest rates temporarily set to 0%.

  5  Forbearance Counts Toward Forgiveness:

  ◦  New regulations allow mandatory processing forbearances to count toward forgiveness for IDR plans and PSLF, a significant change from past practices.

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• Lower Monthly Payments
• SAVE plans base monthly payments on income and family size, so some borrowers may qualify for $0 payments. For example, undergraduate borrowers may see their payments reduced from 10% to 5% of their discretionary income.
• Interest Subsidy
• If a borrower makes their full monthly payment but it doesn't cover the interest, the government will cover the remaining interest. This prevents the balance from growing due to unpaid interest.
• Loan Forgiveness
• SAVE plans can lead to significant loan forgiveness, especially for borrowers with low incomes, high debt-to-earnings ratios, or sub-baccalaureate loans. For example, borrowers who originally borrowed $12,000 or less may be eligible for forgiveness after 10 years.

Schedule your a consultation with a SLD Coach: Click Here

Register for an upcoming student loan expert info session: Click Here

Top 10 Key Points:

Extended Deadline for Consolidation: The deadline for borrowers to consolidate their loans to benefit from the IDR Account Adjustment has been extended to June 30, giving FFEL and Perkins loan borrowers extra time to apply for a Direct consolidation loan.

Automatic Benefits for Some: While the IDR Account Adjustment will automatically apply to some borrowers, others will need to take specific actions to benefit from the program.

Scope of the IDR Account Adjustment: This adjustment counts past loan periods that were previously ineligible, which can lead to immediate forgiveness for some or reduce the remaining loan term under income-driven repayment (IDR) plans.

Impact on Public Service Loan Forgiveness (PSLF): The adjustment also benefits those pursuing PSLF, potentially leading to loan discharge in as little as 10 years for borrowers in nonprofit or public sectors.

Parent PLUS Borrowers Included: Parent PLUS borrowers also stand to gain from the IDR Account Adjustment, which can count time spent in repayment toward the 25-year IDR loan forgiveness term and toward PSLF.

Enhanced Credit for Past Payments: Under the IDR Account Adjustment, borrowers can receive credit for nearly any past period of repayment under any type of plan, as well as certain periods of deferment and forbearance.

Maximizing IDR and PSLF Credits: By consolidating by June 30, borrowers can ensure that their consolidated loans reflect the highest amount of payment credit for IDR or PSLF from the underlying loans.

New Dashboard Incoming: By September 2024, the full implementation of the payment count adjustment will allow borrowers to track their IDR progress via a new dashboard on StudentAid.gov.

Special Considerations for Direct Loan Borrowers: Direct loan borrowers who consolidate can receive the weighted average of the IDR credit from underlying loans, a change from previous rules where consolidating would erase previous IDR credit.

Important Deadline Reminder: Borrowers have until June 30 to consolidate their loans to maximize their benefits under the IDR Account Adjustment and PSLF, after which new rules on credit calculations will apply.

Schedule your a consultation with a SLD Coach: Click Here

Register for an upcoming student loan expert info session: Click Here

Top 10 Points Covered:

Extended Deadline: The new consolidation deadline for borrowers with non-federally held FFEL loans is now June 30th, extended from the original April 30th deadline.

Payment Count Adjustment: The adjustment will be fully implemented in September 2024, ensuring borrowers receive credit for all qualifying periods towards loan forgiveness.

Importance of Consolidation: Borrowers with commercial FFEL and Perkins loans need to consolidate into the Direct Loan Program to benefit from the payment count adjustment and potential PSLF.

Automatic Adjustments: For Direct Loan and Department-held FFEL Program loans, the payment count adjustment will be automatic.

Scope of Adjustment: The adjustment includes credit for months in repayment status regardless of payment status, significant forbearances, and certain deferments.

Benefits Already Rolled Out: As of August 2023, the Department has already begun identifying and discharging loans for borrowers whose updated payment counts qualify them for forgiveness under IDR or PSLF.

Financial Impact: So far, the adjustment has led to $49.2 billion in forgiveness for nearly 1 million borrowers.

Verification of Employment for PSLF: Borrowers can receive credit toward PSLF for any month covered by the payment count adjustment, provided they certify their employment for those months.

Information and Resources: Borrowers can find detailed eligibility information and consolidation guidance at StudentAid.gov/idradjustment.

Loan Identification: Borrowers unsure of their loan types can verify this information through the “Loan Breakdown” section on their StudentAid.gov dashboard.

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Stay tuned for more updates and detailed discussions on each of these points in our upcoming episodes. 

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Interested in becoming a student loan expert and to be trained directly by Dr. Lewis? Check out an upcoming info session:

https://thestudentloandoctorllc.as.me/sldmentorshipinfosession

Thank you for tuning into The Student Loan Doctor Audio Newsletter.