income driven repayment account adjustment

The income driven repayment account adjustment is a one-time adjustment that will increase the number of qualifying payments that borrowers have made toward income driven repayment plans. This could lead to a larger loan forgiveness amount for some borrowers. For undergraduate loans, the repayment time is 20 years–for graduate loans, it is 25 years.

But you must have a DIRECT LOAN. If you are nearly 20 years into repayment, you likely have one of the older guaranteed student loans. If you have any of the older commercially managed Federal Family Education Loan (FFEL) or Health Education Assistance Loan (HEAL), you are not eligible for the one-time adjustment. To be eligible for the income driven repayment account adjustment, borrowers must have commercially held FFEL loans and consolidate them into a Direct Consolidation Loan.

The good news is that the deadline that was May 1, 2023, has been extended to the end of 2023. Don’t wait. This one-time adjustment will be life changing for many people. Borrowers who consolidate their FFEL loans into a Direct Consolidation Loan by the deadline will receive a one-time adjustment that will increase the number of qualifying payments that they have made toward income driven repayment plans. This could lead to a larger loan forgiveness amount for some borrowers.

Borrowers who accumulate time in repayment of at least 20 years (undergraduate) or 25 years (graduate) will see automatic forgiveness, even if not currently enrolled in an IDR plan.

Borrowers who are interested in the income driven repayment account adjustment MUST consolidate their FFEL loans into a Direct Consolidation Loan by the end of 2023. The student loan repayment pause is ending soon. Our law firm can analyze your loans to determine how this one time adjustment will benefit you. Call 713-974-8099 or email esouthward@busby-lee.com to schedule student loan consultation.