A federal court issued an injunction preventing the U.S. Department of Education from implementing the Saving on a Valuable Education (SAVE) Plan and parts of other income-driven repayment (IDR) plans. As a result, the IDR and online loan consolidation applications are temporarily unavailable. Borrowers can still submit a paper loan consolidation application.

Payment Count Adjustments Toward Income-Driven Repayment and Public Service Loan Forgiveness Programs

More than 3.6 million William D. Ford Federal Direct Loan (Direct Loan) Program borrowers will receive at least three years of credit toward loan forgiveness, and many will see their loans forgiven automatically.

FAST FACTS

Q: Why is this happening?

  • A: This adjustment is intended to more accurately reflect borrowers’ payment counts.

Q: When will it be done?

  • A: The adjustment is currently underway and will continue through summer 2024.

Q: Who is doing the recount?

  • A: The U.S. Department of Education is conducting this payment count adjustment.

The U.S. Department of Education (ED) currently expects that the payment count adjustment will be completed by Sept. 1, 2024. When we implement the adjustment, it will automatically be applied to all Direct Loans and FFEL Program loans that are managed by ED at that time. This includes Direct Consolidation Loans that repaid a privately held Perkins or FFEL Program loan and that are disbursed before the adjustment occurs.

Please note that submitting a consolidation application alone does not guarantee any benefits under the payment count adjustment. In general, it takes at least 60 days to process a Direct Consolidation Loan application and to disburse the new loan. This means that if you want to consolidate your loan(s) in order to get the benefit of the adjustment, you should submit a loan consolidation application by June 30, 2024.

Who This Is For

This information applies to you if you are

  • on an income-driven repayment (IDR) plan or were on one in the past;

  • in the Public Service Loan Forgiveness (PSLF) program; or

  • not on an IDR plan but are interested and have Direct or Federal Family Education Loan (FFEL) Program loans held by the U.S. Department of Education (ED).

If you aren’t on an IDR plan but want to reduce your monthly payment, find out if you’re eligible for an IDR plan.

If none of the above statements match your situation, review the Q&As below to see if you have other options.

About the Improvements

If you’re on an IDR plan or working toward PSLF, your remaining loan balance gets forgiven after you make the required number of payments (the amount of time depends on your plan, see below).

In the past, there were a variety of reasons why some months may not have been credited toward loan forgiveness—for example, months when you were in a payment plan that wasn’t eligible.

With this payment count adjustment, we will change whether certain payments or months are credited toward your loan forgiveness. Depending on the status of your loan repayment, this change will result in one of the following for eligible borrowers:

  • You still have more time left until the end of your repayment period. You will be closer to the end of your repayment period and closer to forgiveness. Find your repayment plan options.

  • You reach the end of your repayment period. You will automatically receive loan forgiveness.

  • You have more than the number of months required in your repayment period. In most cases, you’ll receive a refund for any overpayment. Learn about refunds.

How It Works

We will review every borrower account that has at least one Direct Loan or one FFEL Program loan held by ED. We will identify all payments to be counted and instruct your servicer to make the update to your account.

  • We have begun to review loans that have been in repayment long enough to qualify for IDR forgiveness (borrowers who have been in repayment for 20 or 25 years). We will then reevaluate your account every other month to determine if additional borrowers will qualify for forgiveness.
  • Next, we will review borrowers with at least one approved PSLF form to update the months that could qualify for PSLF only. These borrowers will see their PSLF payment counts update each month until we make the final adjustment to their IDR counts in 2024.
  • Finally, we will review all eligible loans to update the months that qualify for IDR forgiveness.

If this review results in you being eligible for IDR forgiveness, we will contact you and give you the chance to opt out of receiving the forgiveness.

Borrowers leaving default through Fresh Start, assignment from a guaranty agency, or loan rehabilitation will receive the payment count adjustment treatment at that point even if that occurs after the adjustment is applied to other borrowers.

Payment Count Adjustment for Eligible Borrowers

ED will conduct an adjustment of IDR-qualifying payments for all William D. Ford Federal Direct Loan (Direct Loan) Program and federally owned Federal Family Education Loan (FFEL) Program loans.

The payment count adjustment will count time toward IDR forgiveness, including

  • any months in a repayment status, regardless of the payments made, loan type, or repayment plan;

  • 12 or more months of consecutive forbearance or 36 or more months of cumulative forbearance;

  • any months spent in economic hardship or military deferments in 2013 or later;

  • any months spent in any deferment (with the exception of in-school deferment) prior to 2013; and

  • any time in repayment (or deferment or forbearance, if applicable) on earlier loans before consolidation of those loans into a consolidation loan.

Generally, repayment status includes any periods where the borrower was enrolled in a repayment plan. Repayment status does not include periods in forbearance, deferment, bankruptcy, or default. However, certain periods of forbearance, deferment, or default will count toward forgiveness in the circumstances described above.

Any borrowers with loans that have accumulated eligible time in repayment of at least 20 or 25 years will see automatic forgiveness, even if they are not currently on an IDR plan.

Borrowers will continue to see the COVID-19 related forbearances counted toward IDR and PSLF forgiveness.

We encourage borrowers who have commercially managed FFEL, Perkins, or Health Education Assistance Loan (HEAL) Program loans to apply for a Direct Consolidation Loan by June 30, 2024, to get the full benefits of the payment count adjustment.

In most cases if borrowers made qualifying payments that exceed the applicable forgiveness period (20 or 25 years), they will receive a refund for their overpayment.

Borrowers with loans in default can benefit by getting out of default—including through the Fresh Start initiative. Borrowers who exit default prior to the end of the Fresh Start period will receive the full benefit of the payment count adjustment and receive credit for periods in default from March 2020 through the month they exit default. After the Fresh Start period, only borrowers who rehabilitate to leave default will benefit from the adjustment, but they will not receive credit for periods in default during the payment pause.

Effects on Public Service Loan Forgiveness (PSLF) Applicants

  • Borrowers with at least one approved PSLF form will begin to see their PSLF counts adjusted in Fall 2023.

  • Borrowers who consolidate will have their PSLF counts temporarily reset to zero, and these counts will begin adjusting in Fall 2023.

  • PSLF counts will continue to be adjusted each month until the IDR counts for all federally held FFELP and Direct Loans are adjusted in 2024.

  • After the adjustment in 2024, all periods credited toward IDR will also be credited toward PSLF for eligible loans and periods where the borrower certifies public service employment.

  • If you’ve applied or will apply for PSLF and certify your employment, you may see the benefits of this adjustment to your qualifying payment count.

  • These changes will be applied automatically, to all PSLF-eligible Direct Loans, including consolidated and unconsolidated parent PLUS loans.

  • If you believe you might benefit, use the PSLF Help Tool to certify periods of employment and track your progress toward forgiveness.

  • Borrowers who have commercially or federally held FFEL loans and who apply to consolidate those loans into Direct Consolidation Loans by June 30, 2024, will also get PSLF credit under the payment count adjustment.

If you’ve made a complaint to your servicer and it has not been resolved to your satisfaction, you can submit a complaint to us.

To read more about these announcements, read ED’s press release from our April 2022 announcement.

Questions & Answers

What types of loans qualify for the adjustment?

How long do I need to make payments before I receive forgiveness?

How do I find out if I’m currently on a loan repayment plan?

I believe I now have 20 or 25 years’ worth of payments. Will my loans be forgiven before the COVID-19 payment pause ends?

How will the payment count adjustment affect me if I haven’t applied for IDR before?

Why can I get credit for payments now even though I’ve never been on an IDR plan?

Will my credit toward forgiveness from the payment count adjustment go away if I don’t reach forgiveness right away?

How can I figure out which of my payments now qualify for IDR and/or PSLF?

How does this work if I was in forbearance?

Can I get payment credit for time I spent in deferment?

Can I get payment credit for time I spent in a grace period?

Can I get payments credited for time I spent in either an in-school status or in-school deferment?

How far back in my repayment history can I get credit for time in repayment?

How does this work if I consolidate loans with different amounts of time in repayment?

I have submitted or plan to submit a request to consolidate my loans, but I received a notice that one or more of my loans will be forgiven. Do I need to do anything?

If I consolidate, will that reset my payment count for IDR and PSLF?

Can I get a refund on payments made before I consolidated?

Why do I have to apply to consolidate by the end of June 2024?

Should I consolidate my other federal student loans with my parent PLUS loan?

I have only one FFEL consolidation loan. Can I consolidate to take advantage of the payment count adjustment?

I am a PSLF borrower, and my qualifying payments have been updated to include periods of deferments or forbearances. If I consolidate now, will I lose those periods of eligibility?

How do I get a refund if this change results in me going over the number of months required in my repayment period?

Can I get a refund if I already received forgiveness or paid off my loan?

What should I do if I have commercially held FFEL Program loans?

What if I have a joint spousal consolidation loan and can’t split this loan before the IDR payment count adjustment?

I’m in default. Can my loans be forgiven under this adjustment?

What if I have a parent PLUS loan? How can I take advantage of the payment count adjustment?

I have at least one Health Education Assistance Loan (HEAL). Can I benefit from the adjustment?

Will this impact my taxes?

I think there is a mistake with my payment count. Who should I contact?

What long-term changes is ED making to improve how my progress towards repayment or forgiveness is documented?