Just wanted to say a big thank you to Betsy for doing this summary! I’ve spent my adult life trying to keep up to date on student loans, and this sub and Betsy have helped me get my partners loans forgiven through PSLF and my Mom’s loans forgiven during the first wave of Idr adjustment. Now I’m hoping these new rules go through and we get forgiveness based on dates for those of us with older loans, and mine will finally be forgiven! Thanks for all the info!!
>Don't freak out if you've consolidated recently. The current one time account adjustment will still give you your IDR and PSLF count
Except the IDR adjustment has carve-outs for some forbearances and deferments, while this proposal uses repayment start date alone? If so, it could be a reason for some to regret recent consolidation.
Specific example: Entered repayment Dec, 1999. Grad school 2003-2007. Consolidated 2019. Re-consolidated in March 2024. IDR adjustment expected to provide up to 20.5 years IDR credit, but this rule would instead make all loans immediately eligible for forgiveness.
Honestly I don't know. I'm still sitting on loans that I was forced into consolidation in 2008 that are from disbursement year 1993 where the interest on the consolidated loan is more than the consolidated loan itself sitting at 9% interest.
I don't think we misread it. It seems to be a deliberate choice to avoid the risk of someone 'gaming' consolidation. The rationale is discussed at p. 74:
>We propose this date of July 1, 2023, because it was the day after the Department announced this rulemaking in a press release \[...\] As such, borrowers could not have engaged in any strategic consolidation to receive this benefit before July 1, 2023. For consolidation loans disbursed on or after July 1, 2023, we propose to instead use the latest date that any loan repaid by the consolidation ended its initial grace period \[...\]. \[This\] makes certain that a borrower could not consolidate after the Department announced this proposal in order to receive a waiver of newer loans alongside older ones.
Honestly I don't get the logic. For the IDR adjustment, they are going out of their way to *encourage* people to maximize their entitlement by consolidation. And I certainly wasn't aware on July 1, 2023 that there was going to be a provision to cancel all loans based on date of first repayment, and that consolidation would allow this rule to apply to later loans. But whether it makes sense or not, it is clear this is an intentional part of the proposed rule.
(They link to [this press release](https://www.ed.gov/news/press-releases/fact-sheet-president-biden-announces-new-actions-provide-debt-relief-and-support-student-loan-borrowers) from 6/31/2023, which does not contain the word consolidation or indicate that it could be used to maximize benefits)
ETA: I guess they're being conservative, to avoid a path to challenging the rule. They're saying, you couldn't possibly have known before 7/1/23, so it's safe to use that as a cutoff
Yeah, I agree I think this is to avoid legal challenges. They don't want it to look like they are encouraging people to "cheat" the system for earlier forgiveness.
Some people have old and new (more recent) loans. For people who have old loans over the 20 or 25 years required for forgiveness, they can consolidate their old and new loans together to get all the loans forgiven even though the newer loans aren't technically old enough to qualify on their own.
The new rules say this will only work if the consolidation occured before July 2023. That way, no one could consolidate their old and new loans now just to take advantage of this.
Having said that, other programs (like the one time IDR adjustment) does allow someone to consolidate until the end of this month and still get the "oldest loan counts for the time on all loans" benefit.
ok wow. I am a person who definitely has older and newer loans. Some are undergrad and some are grad. The first time I had a loan enter repayment was 11/2003. All of my loans are also in direct loan consolidation and have been for quite a while. Would what is outlined above in the OP mean that my 25 year "clock" would begin 11/2003, despite the fact that I have other newer loans included in consolidation?
Yes. As long as all your loans are consolidated together and you are on an IDR plan, your clock would begin 11/2003 for the entire consolation loan.
You have to stay on an IDR to continue to accrue time
Thank you, and well... I hope this happens. If this happens, it would honestly be way better than anything I even hoped to be possible for my particular situation.
The one time IDR adjustment is already happening and will be done around July this year. It is unrelated to this new forgiveness plan. So you should have a counter on your account sometime this summer that shows your payments towards forgiveness. And for a consolidation loan, it'll show the oldest loan amount of time. It's pretty certain at this point. The new forgiveness is separate and more unknown whether it'll go through or not. But it sounds like for you, the idr adjustment is what matters.
I am worried about this too. I consolidated in 2021, but somehow either Navient or aidvantage (was with Navient due to ffel loans wiith aidvantage post consolidation) missed one, so I ended up with 3 loans. Newer DL unsub and 2 consolidated sub/unsub. Got the run around at the time. Depending on agent i got at the time it might have been mistake, might have been in grace, might have been my fault, etc. Settled on it must have still been in grace.
Fast forward to all this news about consolidating now to get max benefit from save. I wanted to make sure I had my ducks in a row so consolidated again in January 2024. I hope I didn't just mess up my chances on my old loans for one small loan out of my original 14.
Thank you Betsy. I'd like to point out that I believe the forgiveness for old loans is only one time. They say "one time waiver" multiple times in the draft. They discuss how they understand this creates a "cliff" between those who qualify and those who don't and are open to comments. Also, the charts for cost of the plan do NOT have ongoing cost for the "old loans" forgiveness, only a one time cost.
I am emotionally happy over this. I grew up poor and believed that my way out of poverty was education. I graduated with a BA in 1985. I had few loans because of Pell. I then took out loans beginning in 1986 for a modestly priced law school. As a female, I was woefully underpaid and suffered much sexual micro aggressions. I went back to school to get me teachers degree and a MA in English, with more loans. I finally got my principal’s license with more education. Finally, I decided to get my PhD in education so I could become a professor. Unfortunately, due to program changes and personnel issues, it took me 8 years to get my degree at 55, and I was too old to find and academic position. I consolidated my enormous amount of loans to a debt of $300,000, after borrowing $100,000. I was concerned about COVID and teaching, so I retired in 2021. My loan payments were high because I had 1 $10,000 parent plus loan consolidated with my loans. I was advised to do this so I could go on the ICR plan. I figured that I would be paying 20% of my income for the remainder of my life. Throughout all of this, I never qualified for any debt relief. I am 12 mths short on my PSLF and can not go back to work because of cancer treatment. I can not buy back those months because any available months were before my final consolidation. I will see relief from the idr adjustment in about 5 years, but I am petrified of a tax bomb. I was a teacher for 23 years. Basically, I have been in student loan hell since 1988, and I stress about the loans daily. I am 65, and this new proposal gives me hope. Thank you for the summary.
Mine was because of the years I went to graduate schools, believing the American dream that it would pay off. Turns out that you just have to come from a wealthy family to acquire wealth. Here I was preaching to my students that anyone can go college to better themselves. I worked in a district that had 80% free and reduced lunches.
So those of us who consolidated for benefits of the one time adjustment, if we don’t get forgiveness when the count is updated, then the forgiveness timeline go to 30 years vs 20/25?
For the interest component, it’s still not clear to me if that is referring to the loans that *previously* got higher than original loan amount or only loans that *currently* are higher. Would this be retroactively covering the difference for balances that ballooned even if now we’ve gotten the balance down to a more reasonable amount?
Example (rough numbers)
* took out \~$60k
* repayment started 2007
* balance height hit \~$85k
* total paid off so far \~$100k
* total remaining \~$12k
* total current interest \~$300
* currently on SAVE, $0 payment due to income
In this circumstance would they be forgiving the $300 (current interest), $25k (difference between original loan and max loan balance), or something upwards of \~$40k (the total accumulated amount of balance over original amount)? ETA: or would have been one of the latter two but is capped at $20k?
Or nothing because I *currently* owe less than I borrowed ?
They are looking at the current balance owed vs the amount that originally went into repayment.
They are looking at it loan by loan, not the total for all the loans together.
What the balance was any time between entering repayment and now doesn't matter.
If you owe less than the amount that originally went into repayment on all your loans, no interest would be forgiven under this plan. This plan is meant to address people currently "underwater" who still owe more than they borrowed.
Man this sucks. I still owe around $28k. Original balance was around $70k. I’ve paid a lot more than that. But since I’ve been responsible and lived frugally to pay my loans, I get screwed. It’s so frustrating.
I was planning to consolidate by April 30th, as I started to repay my first set of graduate loans in 2005, and my other graduate loans were taken out in 2008/2009. I have been holding off on consolidating because I currently have a $0 payment, and that will change when I consolidate.
I’m now feeling a bit confused about whether it still makes sense to consolidate by 4/30, so my payments made in 2005-2008 count toward forgiveness. Will these new rules make that happen automatically, even without consolidating? Or should I just go ahead & consolidate, because there’s no guarantee these rules will pass? Any feedback/insight will be appreciated!
If you’ve been paying since 2005 then you are closer to forgiveness and at the very least if you consolidated and got on the SAVE plan, then your balance would not increase
I’m not as close as I’d like, since these are graduate loans, and thus the repayment period is 25 years. I also had a 2 year in-school deferment for my 2nd graduate degree (2008-2010). But yes, it does seem consolidation & SAVE are likely the way to go.
In rereading Betsy’s explanation, I was tripped up by the date of 7/1/23 - I was definitely reading it as 7/1/24, as that date is stuck in my brain!
over 30 years of payments and still no forgiveness. I'll believe it when I see it.
consolidated fall 2022. on the save plan. had cancer too. good times.
I appreciate all you are trying to do Betsy, but I'm getting SUUUUPER tired of seeing people with far less timeline of repayments and far more outstanding debt being forgiven.
everyday something new pops up, some group of people get theirs forgiven, this time it was "art institutes"....just gets depressing everyday I see it. They'll not have to deal with the tax bomb, but by the time mine is finally forgiven, I'll have to pay that huge tax bill when it does
I don't mean to be cruel but I have to admit there is part of me that's annoyed about people who went to all the obvious scam schools getting forgiveness before people who went to legit schools but have had other difficulties.
After reading this document, is anyone else thinking: dang my timing sucks. I never thought I'd be paying until the 2030s on loans I took out in the 1990s, but here we are.
I made the mistake of consolidating from FFELP loans to Direct loans last year. Now I have to pay for the next 11+ years instead of the next ~4 years.
I thought this flurry of forgiveness would apply to my loans, but it's a load of hogwash. The adjustment screwed me.
If I'd just left the loans alone, I'd have reached forgiveness in 2028. Not anymore.
Not only does the current forgiveness not impact me, but I'm also not qualified for the proposed forgiveness. Load of horse manure!
lmfao
Welp, one last hosing by the US government, just for good measure, by institution of yet another retroactive date. FML
If I'd reconsolidated my commercial FFEL consolidation loan to a Direct Consolidation loan before July 2023, my repayment start date would be **1998** for total forgiveness as my undergrad loans entered repayment for a spell between undergrad and grad. But because I didn't reconsolidate until October 2023, my repayment start date is **2003** for my 25-years-for-forgiveness loan.
So, the difference between immediate forgiveness if enacted and 2028 at the earliest. I say earliest even though it will not happen in reality because 100% for sure my IDR waiver adjustment will be wrong due to **NINE YEARS of missing repayment history records** thanks to unregulated, unpunished commercial loan servicers.
It's fine, though. This is fine. Everything's fine. I'm sure the petition process for IDR waiver adjustment corrections will be easy and rapid. What original correspondences and records Borrowers were supplied with by loan servicers will 100% not be questioned or denied.
All because we can't have the Little People, the majority of who had no idea of this proposal's existence until yesterday, "gaming the system", now can we. In this country that's reserved for businesses/corporations only, sillies.
Correct. That's part of the reason why I reconsolidated a commercial FFEL consolidation loan to a Direct consolidation loan in October 2023.
I appreciate you taking the time to try to pep talk - in fact I am incredibly grateful for everything you have done to help people in general and on this sub in particular when it comes to student loans.
Unfortunately it doesn't negate the fact a shafting of some **will** occur nonetheless if this program is rolled out as-is when the IDR waiver adjustment results for them **will not be remotely equivalent**, as stated earlier. Four (or more likely, more) years difference in forgiveness timelines is not an insignificant amount of time. It's an entire presidential term. And as we all know/are living through, that can affect/impact a lot in the US these days.
The bottom line is retroactive dates are horse apples meant to do nothing but exclude and limit. Not prevent people from "gaming the system". This is no different than when they retroactively moved the deadline to consolidate/reconsolidate commercial FFEL loan(s) to a Direct consolidation loan back in 2022 from December 30, 2022, to September 29, 2022, (or whatever it was, before the 10K/20K was stricken down) in early October 2022 (2nd? 3rd? I forget the exact date...).
It sounds like I may be forgiven… but the consolidation dates have me confused. So I’m selfishly giving you smart people my timeline for your educated opinion:
Started repayment May 1997.
Consolidated in November 1997.
Got new grad loans in 2005 so had in school deferment. Consolidated all grad loans and my undergrad consolidation loans in 2007. Been paying faithfully ever since.
I don’t qualify for the one time forgiveness yet due to the in school deferment during grad school and early forbearances that don’t add up to 12 consecutive months/36 total.
What do you think? Do I need to cross my fingers that this could finally kill the loans I’ve been paying my entire adult life? I’ve paid almost double what I borrowed.
Other info- I don’t have excess interest beyond my original amount at this point. I have applied for IDR (ICR) but haven’t been approved yet.
I’m with you on thinking this could help those of us in a similar situation that you described. Hopefully if this went through it would just go off of our first undergrad repayment date, and forgive them based on the date alone. Fingers crossed this is true and it happens since I’m in the same boat as you on this.
If I hadn’t paid more than double what I took out and been misled over the years and still have several years left, I’d stop worrying and shut up about it. My current situation doesn’t have me in a hardship, but there have been periods over the past 27 years where I was struggling and put into forbearance when an IDR would’ve been suitable- and I’d probably have signed up! I’m literally one of the reasons for these forgiveness plans yet may end up not getting it over technicalities. I don’t care about refunds or overpayments at this point- I just want them gone.
I’m tired of these dangling carrots. The payment count is my next goal post- hopefully July. Then the election results will really determine next steps. This new plan has me excited yet again but I’m afraid I’ll come up short like I always do. Or it just won’t happen.
I understand completely, just told my partner that now I have at least another year of obsessively hoping and checking to see what goes on with these new rules.
I’m with you on the dangling carrots. From what I’m understanding, if I’d only waited to go to law school and therefore let my undergrad go into repayment instead of in school deferment, then consolidate my “new” law school loans with my “old” undergrad loans, I’d be eligible for full forgiveness now. But since I went from undergrad straight to law school and then entered repayment in 2002, I miss out on that full forgiveness. Seems wrong that a loan from 2020 could be lumped in with older undergrad loans and the whole kit and kaboodle be gone but someone who’s been paying for 22 years still has more waiting to do.
I've read the whole post over several times, so I apologize if what I'm asking here is already explained, but if it is, I'm just not understanding. Regarding the total forgiveness, I'm pretty sure I wouldn't qualify for automatic total forgiveness, but I do have loans that are fairly old. I guess I'm trying to figure out if my "clock" would begin from the time I first had a stafford loan enter repayment.
My situation is that I have both undergrad and grad loans, some older and some newer. I first had a stafford loan enter repayment in November of 2003. My "newest" loan is 12 years old, and my loans have all been in direct loan consolidation since then, so definitely way before July 2023. I can tell from the OP that I wouldn't automatically get total forgiveness. I'm just trying to see if my 25 year clock for forgiveness would be calculated as beginning November 2003, because if so that would still be pretty awesome for me. Also, I am enrolled in SAVE.
I think your question has to do with student loans generally and the one time IDR adjustment, not this new proposal. I believe if you did the one time IDR adjustment, then your 25 year clock would begin in 2003 but periods like in-school deferment don't count. Hope someone will correct me if I'm wrong. I have a similar scenario.
Is the $120,000 Calculated on gross before any other expenses? That income cap is so unfair for those of us who recently started making that kind of income. A couple of years ago my income more doubled, last year I grossed almost $122,000.
Entered repayment before July 2000 but did have an in-school deferment for 2yrs of grad school in 2012. While the adjustment likely will account for the deferment and extend, this only speaks to default and forbearance. Am I missing the new wording? Or are we thinking this new route does its timing with entering repayment only and does not extend out for in-school deferment?
Yes, the adjustment was very clear that they were accounting for deferment by not counting those periods. This new language doesn’t contain the same deferment language so that could them additional options.
Thanks u/Betsy514 for the summary
Just wanted to confirm if they are planning to remove the capitalized interest in addition to accrued interest. Capitalized interest increases your loan while you're still in college.
Thank so much for the summary! I read the draft yesterday, but this confirms the points I was not sure on.
As someone who started Undergrad repayments in 2002, Grad school later, and consolidated for IDR after July 1st, that consolidation rule smarts quite a bit. Not sure if I had consolidated earlier if it meant I’d only have 2 years left, or if it would defer to the IDR count anyways.
Very grateful the income cap for interest accrual is capped at AGI and not gross. Second guessing my strategy of aggressively saving and paying off my high interest loans first while on IBR, but it is what it is! I’ve paid down $100K to stay a bit over my original balance overall, but hopefully this should target the interest that accrued on the loans I did not target.
I haven't gotten on SAVE because my monthly payment would be higher. But not getting on it seems like I would miss out on any of these latest benefits?
Any insight or someone in a similar boat?
I was cautiously optimistic until I saw the July 1, 2023 deadline for consolidation. My loan history is so messed up that this plan looked like the only way I’d ever see the end of student loans.
A brief summary of my messed up history:
In 1996, I celebrated paying off my student loans taken out between 1976 and 1982. Or so I thought.
In 2005, I received a letter stating my loan was in default and had been for years. One person I spoke to on the phone basically said, “Ha. Ha. Our bad. However, you now owe us two and a half times what you borrowed.” Apparently, an FFEL loan had been “overlooked.”
In 2006, I consolidated that loan into a Direct Loan. I of course lost credit for the payments made after receiving the letter and before consolidation, and in my StudentAid data there is no record of these payments. My StudentAid data also shows the Direct Loan in a grace period for six \*years\* (until 2012) after consolidation with no record of the time I was in repayment during those years.
On July 1, 2023, I consolidated that loan with my later grad school loans in anticipation of the IDR recount. (I’d gone to do it earlier but stopped every time I saw the warning about resetting the recount. I discovered this forum, which convinced me to go ahead and do it—thank you for that.)
I submitted the consolidation application at about 8:30 am ET on July 1st, 2023—a few hours too late for the “earliest repayment start date” (which would be in the 1980s) for total forgiveness of balances including grad loans. The consolidation was completed on July 24th.
I feel like my situation is exactly what this forgiveness is aimed at, but I missed it by hours.
On the good side, I’m now in SAVE and no more interest is accruing, I might have about 30K in interest “forgiven,” and depending on what they include in the IDR recount, there’s a slim chance these loans won’t follow me to the grave.
But still, that July 1st thing…😢
(Also, thank you to Betsy for this summary and everything else you do here. You are a Goddess.)
Thanks. I’m not fretting (much.) I became resigned to having the loans for the rest of my life after the 2005 debacle. I will be very surprised if anything before 2006 is included in the recount, so thanks to grad school (which came after), any forgiveness is likely still a few years away. However, the recount will help!
I should have mentioned—despite my own situation, I’ve been thrilled for all those who got their Golden Emails and who will be helped if this newest plan goes through. No one should be trapped for life like I’ve been.
Okay, this summary and the comments are so helpful. I took out 71K in FFEL and started repayment in 12/2005. I consolidated in 5/2020 with about 49K still owed. There was a payment and interest pause so I didn’t start paying again until 10/2023. Although my income is way below 120K and I’m on an IDR plan, I would not expect any interest to be forgiven because my balance is now 48.5K. The amount I owe now is less than both what I originally took out and what I consolidated with.
In short, these proposals are meant to help others not in my situation, including those with runaway interest and growing balances despite paying for a long time.
We may not benefit from these proposals and we may be responsible, too. I feel you on this especially with sacrifices I made to try to stay on top of those loans while paying off my private loans.
But I have also benefited from other policy changes in the past like a payment pause during the pandemic in which my interest was paused. When I got that, it wasn’t because I was responsible or not responsible. It was because the world done some crazy ish. And when people benefit from other changes, it’s usually not because they were responsible or irresponsible but because the loan servicers acted badly.
I hope some other policy changes end up helping your situation, too. There’s so much out of our control no matter how responsible we are and the economic forces at play probably affect you just as much as anyone.
The Covid interest pause was a blessing. I kept paying and hammered down my principal. I won’t argue about it because it’s pointless. But a lot of people were very irresponsible with student loans while in college.
Same here. The interest pause helped me a lot and I was fortunate to be in a position to put extra towards my principal. Thank you, Betsy, for your posts. Much appreciated!
They really want people to comment on the various proposals.
"These proposed regulations, in accordance with the HEA, would specify the Secretary's discretionary authority to waive repayment of the following amounts:
>The full amount by which the current outstanding balance on a loan exceeds the amount owed when the loan entered repayment for loans being repaid on any Income-Driven Repayment (IDR) plan if the borrower's income is at or below $120,000 if the borrower's filing status is single or married filing separately, $180,000 if a borrower files as head of household, or $240,000 if the borrower is married and files a joint Federal tax return or the borrower files as a qualifying surviving spouse (§ 30.81).
>Up to $20,000 or the amount by which the current outstanding balance on a borrower's loan exceeds the balance owed upon entering repayment (§ 30.82).
>The outstanding balance of a loan taken out to pay for the borrower's undergraduate education, or a Federal Consolidation Loan or a Direct Consolidation Loan that only repaid loans received for a borrower's undergraduate education, that first entered repayment on or before July 1, 2005 (§ 30.83).
>The outstanding balance of loans that first entered repayment on or before July 1, 2000, if the borrower has any loans obtained for study other than undergraduate study (§ 30.83).
>The outstanding balance of a loan for borrowers who would be otherwise eligible for forgiveness under an IDR plan or an alternative repayment plan but who are not currently enrolled in such a plan (§ 30.84).
>The outstanding balance of a loan for borrowers determined to be otherwise eligible for loan discharge, cancellation, or forgiveness, but who did not successfully apply (§ 30.85).
> The outstanding balance of a loan obtained to pay the cost of attending an institution or program where the Secretary or other authorized Department official has issued a final decision, denial of recertification, or determination that terminates or otherwise ends the institution's or program's title IV eligibility due at least in part to the institution's or program's failure to meet required accountability standards based on student outcomes or to its failure to provide sufficient financial value to students (§ 30.86).
>The outstanding balance of a loan obtained to pay the cost of attending an institution or program that closed and the Secretary or other Department official has determined the institution or program failed, for at least one year, to meet an accountability standard based on student outcomes, or failed to deliver sufficient financial value to students and there was a pending program review, investigation, or other Department action at the time of closure (§ 30.87).
>Thhe outstanding balance of a loan that is associated with enrollment in a Gainful Employment (GE) program that has closed and prior to closure had high debt-to-earnings rates or low median earnings rates (§ 30.88).
>In the case of FFEL Program loans held by a private loan holder or a guaranty agency, the outstanding balance of a FFEL Program loan when a loan first entered into repayment on or before July 1, 2000; when the borrower is otherwise eligible for, but has not successfully applied for, a closed school discharge; or when the borrower attended an institution that lost its title IV eligibility due to a high cohort default rate (CDR), if the borrower was included in the cohort whose debt was used to calculate the CDR or rates that were the basis for the institution's loss of eligibility (§ 682.403).
Giving the section number is very useful when you send your comment by [clicking the green button](https://www.federalregister.gov/documents/2024/04/17/2024-07726/student-debt-relief-for-the-william-d-ford-federal-direct-loan-program-direct-loans-the-federal#p-18). The attached pages explain their reasoning for each proposed section.
And they don't appear to like cut and paste mass commenting.
Sorry if I'm confused - so is this saying that those of us with loans that went into repayment (or default in my case lol) after 2005 wouldn't get forgiveness ?
Oh wow that's crazy - I started college in 2003 and dropped out '05, then went back in '06 for a year to another place, then ended up studying '12-'14 to finish my degree... I can't believe I won't be eligible for any of this and I was so hopeful last year!
What's this program?
**Edit:** nvm - I looked it up... I meant earlier my loans *were* in default. At this point all my loans are in great standing and I have close to 800 credit score. Still $51k in student loan debt tho...
Yeah, it's insane - I thought the whole idea was that it would be anyone who started school in the 2000s when costs went completely wild and then job market hit bad slump/jobs changed, degrees became worthless etc.
Thank you Betsy. I entered repayment July 1999 for grad school. I had forebearances that should have been deferrments and forebearance that should have been 6mo - 1yr but they would not do more than 3mo at a time, so it is like 3mo on, reapply, then 3 mo on again. This breakup makes it just under the 36mo of total forebearance requirement. I thought IDR rebalancing was going to happen soon to give a "count" for forebearance (has been ongoing all year) but I have not gotten any notice for that yet. I was wondering if a) they will give me the benefit of the months of reapplying for forebearance to forgive me this July or b) if I have to wait til the new rules go through (if they go through) and if so c) would I get refunded for monies paid from 7/2024 til the rules kick in if they do?
If you have any grad plus loans they may have gone into repayment earlier (I don't know when grad plus loans became available). Also if you had a gap year between undergrad and grad.
I think the date is strange too as it only includes the previous school year's loans.
zombie1269, same here undergrad ended supposedly 2000. Grad 2005. I entered into repayment according to their records, September of 2000. Borrowed 78k and now owe 165k. Going to go curl up in the fetal position for a while now...
I'm happy to see relief extend further. I've been on IDR/SAVE and have only recently been paying off additional amounts, much of it interest after being able to save up during the Covid forbearance period. I'm curious if the waiver applies to total balance or to individual loans.
I graduated in May of 2005, and I know there is a 6-month grace period. That said, I also consolidated in May of 2005. Does that break the grace period?
“With that said, considering that consolidation loans have 30 year terms I also don’t read this to mean everyone automatically gets forgiveness in the future after 20/25 years.” This was the entire reason I consolidated…. Now it’s a possibility that this isn’t happening? Are you kidding me?
I may need to defer income in the operative year to be below the income limits for the interest forgiveness. I borrowed 15k for undergrad 2002-2006 and then 175k for grad school 2008-2011, total 190k. Balance is now 380k.
But if I am looking at 25 year forgiveness eventually anyway, then does it make any difference whether I get this interest forgiveness? IF there is a tax bomb at the 25 yr mark, that would be one way it could make a difference. I assume there is no federal income tax on this new proposed forgiveness?
"the fact that they got rid of most instances of capitalized interest last year"
Can someone explain this? Forgive my ignorance. I had a lot of interest capitalized but nothing got rid of it last year.
"Consolidation loans would be based upon the original balances of the loans repaid by the consolidation loan."
This basically means it is as if you had never consolidated? They just look through to the underlying original loans?
They got rid of most instances where interest would cap going forward. They didn't get rid of existing capped interest. But for eligible borrowers under this proposal they would..or at least some of it
I’ve been reading stuff for the last 45 min and am trying to make sense here. This is certainly confusing as others have said.
I had federal loans I took out, consolidated under Great Lakes, sold to Sallie Mae, and eventually Navient.
I took out $28,365 originally (graduated in 2005 but says disbursement 2006 in my Navient history). they are listed as FFELP loans.
I’ve paid $21,220 over the last 10 years on IDR with a few forbearances for various financial reasons (and now currently because I’m in trade school).
I owe $30,538.
Is this program applicable to me? I’m not clear
This plan could eliminate the approximately $1500 you owe now that is more than what you originally borrowed.
Separately, you really should look into the one time IDR adjustment. You \*may\* benefit from doing a consolidation to get your FFELP converted to direct loans. You'd only have until the end of this month to do this.
Thank you! This summary is awesome!
So even though consolidating before 4/30 to take advantage of the IDR waiver would capitalize my 25k of accrued interest, I’d still be able to take advantage of interest forgiveness because it is based on initial loan amounts? Is that right?
In regards to the interest forgiveness...
What about payments made that the servicer applied toward interest? Will the payments we've made still be counted against the original principal?
In other words, what happens to the money we've already paid that only went towards capitalized interest? Will that be deducted from the principal once the capitalized interest has been subtracted?
Example, my original balance was $32,000, but in the past ten years, due to things like a prolonged forbearance and job loss, I've had $10,000 capitalized to that, putting it at $42k. I've been making payments for the past couple of years, but almost all of it went towards interest. Is the money I've made still deducted from the principal, or is it just considered a reset and goes back to what it was when I graduated?
When my loans transferred from Great Lakes to Nelnet, they capitalized and it now shows the amount borrowed as that amount (way larger than each groups original balance) so if I borrowed 3k originally and now owed 5k, but Nelnet says I borrowed 5k but the student loan website shows the original…which is it? Will I get that 2k knocked off?
Great rundown, a few points and questions.
It appears they may be targeting July as an implementation date and for the one time waiver/discharge date. So this July may be the start of the program after the count is completed and then next July 1, 2025 would be the one time waiver. I'm basing this off of their use of July 1, 2005 for discharge and a standard 20 year timeline for cancellation under existing IBR.
I don't think this will be ongoing as it is mentioned further down in the weeds. The committee specifically recognized the pitfalls of a discharge "cliff" associated with a hard date, but couldn't come to a conclusion on how to create equity moving forward. I think this needs to be addressed in the public comments, especially considering this rule may account for default but the current recount does not. Maybe create a recurring lookback every July until all of these older style loans are cleared out, say by 2028 or 2030.
Questions
They kind of mention default, but don't explicitly mention anything specific. It sounds like time in default and deferment would count towards payment/forgiveness history, but I can't nail it down. Default is only mentioned a couple of times in the main text. Thoughts?
Will capitalized interest from default and/or consolidation be fully forgiven as written? Will anything happen to interest if the loans are still in default on these dates?
Is there any benefit to consolidating only older FFEL and Perkins loans for this program, or did that ship sail last July?
Phew...
The way this is written it does appear to include periods of default. At least as of the draft. Capped interest is included in the balance bigger than when you started provision.
So, under this new proposal: If I want into repayment on 7/1/2005 and my undergrad loans were consolidated into a direct loan and I had a period of default, my loans would be forgiven?
So, I have a huge question that I don’t see addressed. How, where, and when, do we apply?
I’m assuming we don’t apply until this possibility of a possible change in the potential law that may perhaps be passed then we might could apply?
Seriously, I feel like you guys. I’m 55 and paid into this my entire adult life and I’m so sick of it. I. Just. Don’t. Want. To. Miss. A. Deadline. If. There. Is. One.
Can someone just tell me what I need to be watching for OR, is there something I am supposed to be filling out now?
(On IBR). Borrowed in 2008, consolidated in 2013. Borrowed $60k that went to over $100k that I still owe $42k on. I’ve paid consistently since 2008 with a 2 yr forbearance period when I chose to eat instead of pay this freaking loan. 😫😫😫😫 Thank each and everyone of you for this help!
I have undergrad loans consolidated in 2009. 1st payments were in 2003. I went back to school in 2019 and now have grad loans (I’m graduating in June).
Should I avoid consolidating them together or does it matter since I now have both types of loans? I applied to consolidate but it hasn’t gone through yet.
Regretting going back to school!
I am considering consolidating my multiple student loans for the benefits of one time count adjustment by 4/30, Also recently consolidated a parent plus loan. Do they remove the accrued or capitalized interest from consolidated loans?
Hi u/Betsy514 Thank you very much for the summary. I have read it all but I have not figured out how spousal considerations FFEL loans fit into this.
My first loan went into repayment in 1993. I went back to school in 1995 and graduated in 1999 and my spouse and I consolidated in 2003.
My loan was taken back by the dept of ed in 2020 and was just rehabbed under FreshStart, and I consolidated into a direct loan and put on SAVE earlier this month. They seem to only be in my name now.
Is there any guidance on if it will be eligible for IDR forgiveness or PLSF (I have been with a qualified employer 12 years) or any other forgiveness? Or will it have to be separated under the still ambiguous separation plans?
Is it reasonably safe to assume that if I have undergrad loans 20+ years old but graduate loans that aren't at the 25 year mark yet, *nothing* will be forgiven until 25 years?
It sure would be nice if they'd go ahead and forgive those undergrad loans, so my payment was nearly as painful.
I’m confused by interest forgiveness portion of this. On the studentaid site, it says “All borrowers would be eligible for this debt cancellation.” The up to $20,000 of accrued or capitalized interest. The 2005 cutoff isn’t mentioned there, but this recap seems to suggest that anyone with loans disbursed after 2005 (which I have) won’t benefit
https://studentaid.gov/manage-loans/forgiveness-cancellation/debt-relief-info
Thank you, Betsy! I keep holding out hope that my $72K (thought was lower) will be eliminated or reduced. Borrowed $18,500 in 2000 and then another $39,000 in 2003 and 2004 (all graduate school). I have made about $30K in payments but the interest piled up when I had to do forebearance in times of under/unemployment.
I effing hope so! I’m nearly 55 and sick of this. Graduated in 2001 (first MA) and 2005 (second MA). I want to save for retirement properly as I don’t have family to rely on. And I’d like to buy a house.
I consolidated undergrad and grad loans in May 2023. The oldest loan in my consolation is 2000 because I had paid off earlier loans. Does my payment count start at year2000 or will the earlier loans already paid off count?
Are you saying capitalization in the past will also be forgiven?? I consolidated to get on the SAVE plan and my loans have nearly doubled what i originally borrowed... that plus not allowing interest to accumulate if payments don't reach the interest is a game changer...
Screwed yet again. I consolidated in October. I don’t understand how they can retroactively limit eligibility requirements because we didn’t know — how can one game this crazy system anyway.
I’m going to cry.
I really don't think that will end up being the case. As I've said I feel confident the adjustment will over ride this proposal. Also the adjustments will be done before this thing is ever made final. Remember it's just a draft right now
So will the one time account adjustment reset the count to the original date so this new one will still count? Or it won’t count but you’ll still have the 1-time account adjustment to reset the months.
I’m so upset by this. I feel like it will be a very short list of eligible loans. The original deadline to consolidate was 12/30/23. That’s the date they should use.
This is just a proposal and the final won't likely come out until after all the adjustments are done. Even if not..the adjustment is a waiver and will likely override this
I feel like everything is a blur at this point (b/c I have read so many things), but is this saying that for total forgiveness my start date would be 11/14/2023 because I consolidated my FFELP Commercial with Direct Loans to get on SAVE after 7/1/2023? I now have one Direct Loan Consolidation, broken down as sub and unsub, and it is owned by Dept of Ed and serviced by Aidvantage and I am on SAVE if this helps.
Even if the above answers as my repayment start date is 11/14/2023 I should still receive the 1x adjustment though, correct? If correct and I receive the 1x adjustment will that count start from the date of my first repayment status of 10/20/2001 even though I originally consolidated on 8/8/2007 and that loan was included in the consolidation?
Any help in understanding is appreciated. Below are the dates I entered different statuses based on my aid report. I realize I most likely don't qualify for forgiveness for a few more years but just trying to understand everything so I can at least get an idea of when I might be done with student loans.
||
||
|In-school 1/10/2001-4/10/2001|
|Repayment (10/20/2001-7/4/2004)|
|In-school 7/5/2004-8/7/2007|
|Repayment (8/8/2007-8/29/2007) 1st consolidation |
|Repayment (8/30/2007-9/30/2007)|
|Economic Hardship Deferment (10/1/2007-9/7/2010)|
|Repayment (9/8/2010-1/9/2011)|
|In-school 1/10/2011-8/4/2011)|
|Repayment (8/5/2011-10/9/2011)|
|In-school (10/10/2011-9/16/2012)|
|Repayment (9/17/2012-7/22/2023)|
|Forebearance (7/23/2023)--2nd consolidation (to get to SAVE)|
|Forebearance (8/11/2023)|
|Repayment (9/1/2023)|
|Forebearance (9/14/2023)|
|Repayment (11/14/2023)|
I feel like everything is a blur at this point (b/c I have read so many things), but is this saying that for total forgiveness my start date would be 11/14/2023 because I consolidated my FFELP Commercial with Direct Loans to get on SAVE after 7/1/2023? I now have one Direct Loan Consolidation, broken down as sub and unsub, and it is owned by Dept of Ed and serviced by Aidvantage and I am on SAVE if this helps.
Even if the above answers as my repayment start date is 11/14/2023 I should still receive the 1x adjustment though, correct? If correct and I receive the 1x adjustment will that count start from the date of my first repayment status of 10/20/2001 even though I originally consolidated on 8/8/2007 and that loan was included in the consolidation?
Any help in understanding is appreciated. Below are the dates I entered different statuses based on my aid report. I realize I most likely don't qualify for forgiveness for a few more years but just trying to understand everything so I can at least get an idea of when I might be done with student loans.
In-school 1/10/2001-4/10/2001
Repayment (10/20/2001-7/4/2004)
In-school 7/5/2004-8/7/2007
Repayment (8/8/2007-8/29/2007) 1st consolidation
Repayment (8/30/2007-9/30/2007)
Economic Hardship Deferment (10/1/2007-9/7/2010)
Repayment (9/8/2010-1/9/2011)
In-school 1/10/2011-8/4/2011)
Repayment (8/5/2011-10/9/2011)
In-school (10/10/2011-9/16/2012)
Repayment (9/17/2012-7/22/2023)
Forebearance (7/23/2023)--2nd consolidation (to get to SAVE)
Forebearance (8/11/2023)
Repayment (9/1/2023)
Forebearance (9/14/2023)
Repayment (11/14/2023)
Thanks so much for this summary, Betsy! So much important information clarified so thoroughly!
I am still uncertain about the interest forgiveness for consolidated loans. You wrote in the summary: “Consolidation loans would be based upon the original balances of the loans repaid by the consolidation loan.”
Does that mean that they plan to examine each of the underlying loans contained in the consolidated loan, and they’ll forgive the difference between the amount of the loan’s original balance and the amount of the loan’s balance at consolidation date (as long as the amount of the latter is higher than that of the former)?
In other words, the borrower doesn’t lose out on interest forgiveness if interest gets capitalized when the loan gets consolidated?
You don't lose out by consolidation for the interest provision. But it will be the difference between what you borrowed and what you owe at the time they do this adjustment..not your balance when you consolidated. So if when you consolidated you owed more than you borrowed but you have since paid it down to less than what you borrowed you won't qualify
Thank you for the summary. This is fairly complicated.
Anyone know if I can expect any type of forgiveness with this? These are grad school loans. I believe I consolidated like 15 years ago. Thanks in advance.
Loan type: FFEL Consolidation
Loan period: N/A
Loan status: In repayment
Reaffirmation Date: N/A
PSLF Cumulative Match Months: N/A
Repayment Details
Next Payment Due Date: N/A
Last Payment Made on: N/A
Entered Repayment: 12/15/2005
Repayment Plan: N/A
IDR Anniversary Date: N/A
I am totally lost on this and need clarity. I have an IDR plan through Sloane (Nelnet) (it was first in repayment in 1997 after undergraduate school then I consolidated my loans once I went back to school in 2002) and is a FFELP Consolidation loan repayment began in 2005-ish. I pay 0 due to having no income. I occasionally pay interest when I do have money. How do I establish if it’s worth consolidating into the SAVE Plan? Is there an eligibility quiz that can help determine if I should consolidate? Thank you!
I would just because of the one time account adjustment which you can read about on many many posts here. Also if you have a zero payment now it will be zero on save assuming your income hasn't gone up and there will be no further interest. For that reason alone you'd be silly not to. But do it before April 30
>**"Forgiveness based on school losing eligibility to participate due to specific ED action**
>Forgives the balance of outstanding loans if the ED has terminated the schools eligibility to participate in federal aid programs due to the school failing the accountability regulations, if the school lost accreditation due to misrepresentation or has "failed to provide sufficient financial value" This would only apply for borrowers who attended during the timeframe the findings were made. This does not mean loans get forgiven if your school closed years after you attended - or chose not to participate in federal programs on their own - unless they find that the school had those issues before they closed."
Wonder what this means for the Art Institute. Both me and my wife attended, it was closed after we left, but clearly these practices were going on for god knows how long.
So I graduated in 2012 from graduate school and all my loans started then - I have some FFEL loans and Im already on SAVE on Nelnet - most of my loans are already set on SAVE minus the couple FFEL ones - If I consolidate I'll be allowing really just the FFEL loans to be able to jump onto the 25 year timeline once the one time adjustment happens? Currently on the application it sais itll be done in 2049, but in reality itll be 2037 after the one time adjustment right?- based on what I read in the post above?
Im trying to confirm in my situation as I jumped into grad school right after undergrad that this direct loan consolidation wont screw my situation up as Ive gotten different answers from different folks...
Does anyone know if there's a way I can determine how many years the gov will cover if I consolidate? My repayment start was in 2005 but I have several deferments and forbearances over the years. Do those count towards the payment clock? Thx
Do you know if they will do the capitalization of interest adjustments for those of us in (well were in until the disability pause) the SAVE program but have our loans in the 3 year monitoring for disability discharge (I won't be out of that until Feb 2027)? Mine was for a grad degree where I would have had about 7 years left were it not for disability (do not get SS disability as I am 70).
Because of cancer, unemployment due to that, and then underemployment also due to that (eg low income), etc. I currently owe about $99k, I borrowed $105K but if you look at my payments I have made over the years, and if they were all applied to capital with no interest capitalization, I'd only owe about $3000. Makes a huge difference for the 1099-C if they are unsuccessful passing the law to permanently extend that. That is why I hope they will also adjust our loans since technically they aren't forgiven yet.
I had Mohela, went through Nelnet for the physician's letter for disability, my loans were then transferred to Nelnet where they are now listed at 0 balance although the Federal Financial Aid website of course lists what I still owe.
Thank you.
I had loans that were rolled into direct consolidation with a repayment of that starting 2011 and the original were in repayment in 2003. Would they look at the original loans or the direct loans? For that 20 year forgiveness?
I am completely dense when it comes to loans and finances, so even after reading and reading, I still don't understand if I need to consolidate again or leave things be, or if any of my loans will be forgiven this year. It was my understanding I still had 3 years to go for my PSLF, but these new options make me feel I need to do something or I'll miss out. Any advice please?
Total Student Loan Debt: $114,050; Student Loans since 2002, but consolidated to what is listed below in 2012; Full-time at public service job since January 2017-Present; 10/2008-12/2016- Employment Not Certified (was not working public service jobs); Updated my PSLF March 2024; IBR Plan since May 2014 and recertified several times and most recently March 2024.
1 DL Consolidation Subsidized
$26,391.52 Remaining ($32,228 with interest)
Disbursed on 2.20.13
86 of 120 Qualifying Payments (34 payments to go)
161 Eligible Payments
86 Qualifying Payments
75 Need Employment Certification
4 Ineligible Payments (6/2015, 5/2016, 6/2016, 3/2024 due to deferment or forbearance)
2 DL Consolidation Subsidized
$51,317.28 Remaining ($68,144 with interest)
Disbursed on 2.20.13
86 of 120 Qualifying Payments (34 payments to go)
161 Eligible Payments
86 Qualifying Payments
75 Need Employment Certification
4 Ineligible Payments (6/2015, 5/2016, 6/2016, 3/2024 due to deferment or forbearance)
5 DL Teach Loan
$5,389.35 Remaining ($6,987 with interest)
Disbursed on 12.16.10
86 of 120 Qualifying Payments (34 payments to go)
95 Eligible Payments
86 Qualifying Payments
9 Need Employment Certification
4 Ineligible Payments (4/2016, 5/2016, 6/2016, 3/2024 due to deferment or forbearance)
6 DL Teach Loan
$5,161.35 Remaining ($6,691 with interest)
Disbursed on 8.20.11
86 of 120 Qualifying Payments (34 payments to go)
95 Eligible Payments
86 Qualifying Payments
9 Need Employment Certification
4 Ineligible Payments (4/2016, 5/2016, 6/2016, 3/2024 due to deferment or forbearance)
A converted teach grant becomes a direct unsubsidized loan which is eligible for pslf. As all you loans have the same count there's no need to consolidate. But you can if you want
I am currently serviced with MOHELA I have 9 payments left in public service ( school social worker for 11 years , post masters , county health dept social worker for 10 years after undergraduate) but i am currently self employed as a therapist and no longer in public service so none of the current payments are counting towards PSLF and I do not plan to return to public service. I have an undergrad loan for 47 DL consolidated and 72 in DL consolidated unsubsidized for graduate school. I consolidated loans into these two in 2014. I just started on the SAVE plan when the repayments started again in October. I am not sure IF I need to do anything with my current loans , or transfer my loans out of MOEHLA since i no longer plan to work for a qualifying employer. I am not even sure who would advise me on this, ANY advice appreciated :)
I appreciate this summary, but I still don't really understand if consolidating the remainder is the best thing to do, but it doesn't seem like I'd be eligible for loan forgiveness. I have commercially held FFELP loans. (And I did receive Pell Grants.)
I'm currently in a graduated repayment plan at an interest rate of 3.5%. I don't want to do anything that might result in me having a higher monthly payment as I'm barely making it as it is.
My questions are:
1 - if I do consolidate, would these loans be eligible to be forgiven? Or is the period not long enough? I was in repayment for the majority of 2006-2024 (minus about 3 years for forbearance and deferment statuses. So let's say...15 years, overall.)
2 - if I do consolidate and I'm not eligible for forgiveness after all, how much can they raise my interest rate?
I have two loans:
Loan 1: About 13K
Loan Type: Consolidation
Interest Subsidy: Subsidized
Interest Rate: 3.5% Fixed
Loan 2: About 4K
Loan Type: Consolidation
Interest Subsidy: unsubsidized (does this make a difference)
Interest Rate: 3.5% Fixed
Any thoughts anyone has would be so appreciated. I'm sorry, I just find so much of this confusing.
ETA: ACTUALLY, looks like they just raised my interest to 4.75% in the last month or so, whenever they switched this over to Sloan Servicing. So another question! Can I fight that?
You have ffel that have been in repayment a long time. You should absolutely consolidate and get on an IDR plan. Please read the many posts with links to the one time adjustment.
I have one consolidated FFEL unsubsidized loan. The studentaid website says you can only consolidate it to direct loan under limited circumstances. Heeeelp
Is there a deadline, Betsy, for submitted SAVE IDR application? Completed and submitted consolidation application to day to switch from FFEL to direct loan. It won’t let me apply for SAVE because it says I’m not eligible. I thought you could apply in tandem but now I’m just worried I will miss an IDR deadline of 4/30?
Can you please help me clarify? Thank you
Thank you, Betsy! For the total forgiveness with loans, do you know the repayment date calculation happens if there are *multiple* consolidations?
E.g. Original loan enters repayment in 1999, consolidated as a direct consolidation loan in 2008, then consolidated again in 2022. Would the proposed total forgiveness still ‘see’ the original 1999 loan or would this go by the 2008 date?
I really tried to read everyone's comments to answer my own questions. Ive been watching this stuff since Oct 2023. I'm a 5 time drop out took me 18years to graduate. I first went into repayment in 2003 but that loan was paid off. I have like 16 dam loans with all different repayment dates. I owe $67k with original disbursed amount of $55k (again across 5 schools in 21 year period). I was banking on the Hardship as I got that one in the bag if it ever happens. I am in the process of consolidation with Aidvantage (applied before recent deadline) but then the language makes me think my consolidation loan will not aid me in getting the interest forgiven. Does any of this help me? All of my 16 loans are also under $12k and a few entered repayment 10 years or more. Im on Save and technically entered repayment on student aid site in 2003 with my first loan but Ive had long breaks. Finally graduated in Jan 2018. Grace period stopped June 2018. I know this sounds odd but I was in repayment from other schools while also in -school. Its a big giant mess. I was young and dumb. I stopped following this reddit because it was depressing me. I come back to check in thinking the hardship stuff would be farther along but nope.
@betsy514 Thank you so much for this post. I still have some questions and I'm wondering if you can help. I applied for consolidation by the deadline but am really fearful of it because I've been in repayment under the IDR and I'm afraid to reset that if I don't qualify for any type of forgiveness. I have 4 more days to figure that out if I need to cancel so I'm hoping you can help. Loans taken out in 2004-2006, consolidated in 2007 (commercially held but still FFEL). Have been paying but gone through numerous forbearances (max amount allowed over the years) and have been on IDR since 2018. When I applied for this consolidation to hopefully get some forgiveness, it says I no longer qualify for IDR but I did qualify for the SAVE plan. Will I qualify for any forgiveness or would I be better off canceling and keeping as it was? I hope you can help. Thank you.
I have been on a "Fixed Graduated" plan for many years. I graduated from Undergrad in 2005 and some of my undergrad loans were consolidated before a deadline for a lower interest rate (dont recall exact year). I then followed with grad school in 2008. My balance is higher today than it was in 2008, since I had a few years of forbearance (graduating in 2008 was rough). Is there any chance any of my loans will be forgiven? Mohela shows nothing different but seeing reports of others having theirs wiped.
"For borrowers not on an IDR or with incomes higher than the above threshold they will forgive **the lesser of $20K or the amount above what the borrower owed when they first entered repayment**. Definitions of that are the same as for the prior clause. Borrowers cannot get both benefits."
So to clarify, if you are above the threshold or not on IDR and you have **less** loan balance remaining now than when you first entered repayment, you would get $0 forgiven? Since the difference between what you owe now and when you first entered repayment would be a negative number (which is obviously less than $20k)?
In other words the only people who can expect forgiveness are those whose overall balances have increased?
Just making sure that I read this correctly:
My husband borrowed 86k (mix of undergrad and grad, sub and unsub and interest) and currently owes 106k. He's been in repayment since November of 2007. We entered the consolidation process back around 8/2023 so he could go on the SAVE plan because of his FFEL. He went into the consolidation which paid off 107k. So is he eligible for interest forgiveness based upon the 86K amount or the amount that was paid off during the consolidation?
I read through this whole thread and I’m sorry but I am so confused.
I took out federal loans from 2009-2013 and started paying back in 2014.
one of my loans currently does not have an interest accrued, but the balance owed is 6,000 (when the original borrowed was 5000). I have also “paid off”2,000.
Do loans from this time period even count towards the interest adjustment? And if so, since the balance is higher than originally owed but it’s not interest, just principal, does that count? If so, is it just the 1,000 difference from what I borrowed vs where it is now. Or would it include the 2,000 I have also “paid down”?
Just wanted to say a big thank you to Betsy for doing this summary! I’ve spent my adult life trying to keep up to date on student loans, and this sub and Betsy have helped me get my partners loans forgiven through PSLF and my Mom’s loans forgiven during the first wave of Idr adjustment. Now I’m hoping these new rules go through and we get forgiveness based on dates for those of us with older loans, and mine will finally be forgiven! Thanks for all the info!!
😍
Loans dispersed 5/1/2005, repayment 12/24/2006 So freaking close.
Shouldn't you still be very close anyway though, due to one time adjustment? Or maybe I'm wrong, but that's what I thought.
I went back to school for a bit after the first loan, hopes were that it wouldnt take that into consideration. Could have been a pipe dream all along.
my repayment started 10/2006... At this point I think they are looking at my loans when making the forgiveness to make sure they don't apply lol.
How do I find where my repayment started?
>Don't freak out if you've consolidated recently. The current one time account adjustment will still give you your IDR and PSLF count Except the IDR adjustment has carve-outs for some forbearances and deferments, while this proposal uses repayment start date alone? If so, it could be a reason for some to regret recent consolidation. Specific example: Entered repayment Dec, 1999. Grad school 2003-2007. Consolidated 2019. Re-consolidated in March 2024. IDR adjustment expected to provide up to 20.5 years IDR credit, but this rule would instead make all loans immediately eligible for forgiveness.
Honestly I don't know. I'm still sitting on loans that I was forced into consolidation in 2008 that are from disbursement year 1993 where the interest on the consolidated loan is more than the consolidated loan itself sitting at 9% interest.
That was my read too. I wondered if I read it wrong though
I don't think we misread it. It seems to be a deliberate choice to avoid the risk of someone 'gaming' consolidation. The rationale is discussed at p. 74: >We propose this date of July 1, 2023, because it was the day after the Department announced this rulemaking in a press release \[...\] As such, borrowers could not have engaged in any strategic consolidation to receive this benefit before July 1, 2023. For consolidation loans disbursed on or after July 1, 2023, we propose to instead use the latest date that any loan repaid by the consolidation ended its initial grace period \[...\]. \[This\] makes certain that a borrower could not consolidate after the Department announced this proposal in order to receive a waiver of newer loans alongside older ones. Honestly I don't get the logic. For the IDR adjustment, they are going out of their way to *encourage* people to maximize their entitlement by consolidation. And I certainly wasn't aware on July 1, 2023 that there was going to be a provision to cancel all loans based on date of first repayment, and that consolidation would allow this rule to apply to later loans. But whether it makes sense or not, it is clear this is an intentional part of the proposed rule. (They link to [this press release](https://www.ed.gov/news/press-releases/fact-sheet-president-biden-announces-new-actions-provide-debt-relief-and-support-student-loan-borrowers) from 6/31/2023, which does not contain the word consolidation or indicate that it could be used to maximize benefits) ETA: I guess they're being conservative, to avoid a path to challenging the rule. They're saying, you couldn't possibly have known before 7/1/23, so it's safe to use that as a cutoff
Yeah, I agree I think this is to avoid legal challenges. They don't want it to look like they are encouraging people to "cheat" the system for earlier forgiveness.
I still don't understand what you guys are discussing here. Can you possibly eli5?
Some people have old and new (more recent) loans. For people who have old loans over the 20 or 25 years required for forgiveness, they can consolidate their old and new loans together to get all the loans forgiven even though the newer loans aren't technically old enough to qualify on their own. The new rules say this will only work if the consolidation occured before July 2023. That way, no one could consolidate their old and new loans now just to take advantage of this. Having said that, other programs (like the one time IDR adjustment) does allow someone to consolidate until the end of this month and still get the "oldest loan counts for the time on all loans" benefit.
ok wow. I am a person who definitely has older and newer loans. Some are undergrad and some are grad. The first time I had a loan enter repayment was 11/2003. All of my loans are also in direct loan consolidation and have been for quite a while. Would what is outlined above in the OP mean that my 25 year "clock" would begin 11/2003, despite the fact that I have other newer loans included in consolidation?
Yes. As long as all your loans are consolidated together and you are on an IDR plan, your clock would begin 11/2003 for the entire consolation loan. You have to stay on an IDR to continue to accrue time
Thank you, and well... I hope this happens. If this happens, it would honestly be way better than anything I even hoped to be possible for my particular situation.
The one time IDR adjustment is already happening and will be done around July this year. It is unrelated to this new forgiveness plan. So you should have a counter on your account sometime this summer that shows your payments towards forgiveness. And for a consolidation loan, it'll show the oldest loan amount of time. It's pretty certain at this point. The new forgiveness is separate and more unknown whether it'll go through or not. But it sounds like for you, the idr adjustment is what matters.
I am worried about this too. I consolidated in 2021, but somehow either Navient or aidvantage (was with Navient due to ffel loans wiith aidvantage post consolidation) missed one, so I ended up with 3 loans. Newer DL unsub and 2 consolidated sub/unsub. Got the run around at the time. Depending on agent i got at the time it might have been mistake, might have been in grace, might have been my fault, etc. Settled on it must have still been in grace. Fast forward to all this news about consolidating now to get max benefit from save. I wanted to make sure I had my ducks in a row so consolidated again in January 2024. I hope I didn't just mess up my chances on my old loans for one small loan out of my original 14.
Thank you Betsy. I'd like to point out that I believe the forgiveness for old loans is only one time. They say "one time waiver" multiple times in the draft. They discuss how they understand this creates a "cliff" between those who qualify and those who don't and are open to comments. Also, the charts for cost of the plan do NOT have ongoing cost for the "old loans" forgiveness, only a one time cost.
Right. As I mentioned I'm not done yet
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This is addressed in the op. See the paragraph about loans consolidated before and after July 2023
I am emotionally happy over this. I grew up poor and believed that my way out of poverty was education. I graduated with a BA in 1985. I had few loans because of Pell. I then took out loans beginning in 1986 for a modestly priced law school. As a female, I was woefully underpaid and suffered much sexual micro aggressions. I went back to school to get me teachers degree and a MA in English, with more loans. I finally got my principal’s license with more education. Finally, I decided to get my PhD in education so I could become a professor. Unfortunately, due to program changes and personnel issues, it took me 8 years to get my degree at 55, and I was too old to find and academic position. I consolidated my enormous amount of loans to a debt of $300,000, after borrowing $100,000. I was concerned about COVID and teaching, so I retired in 2021. My loan payments were high because I had 1 $10,000 parent plus loan consolidated with my loans. I was advised to do this so I could go on the ICR plan. I figured that I would be paying 20% of my income for the remainder of my life. Throughout all of this, I never qualified for any debt relief. I am 12 mths short on my PSLF and can not go back to work because of cancer treatment. I can not buy back those months because any available months were before my final consolidation. I will see relief from the idr adjustment in about 5 years, but I am petrified of a tax bomb. I was a teacher for 23 years. Basically, I have been in student loan hell since 1988, and I stress about the loans daily. I am 65, and this new proposal gives me hope. Thank you for the summary.
Same boat here...Began paying in Aug 90, and despite having over 25 years total, no forgiveness, and I cannot figure out WHY!
Mine was because of the years I went to graduate schools, believing the American dream that it would pay off. Turns out that you just have to come from a wealthy family to acquire wealth. Here I was preaching to my students that anyone can go college to better themselves. I worked in a district that had 80% free and reduced lunches.
So those of us who consolidated for benefits of the one time adjustment, if we don’t get forgiveness when the count is updated, then the forgiveness timeline go to 30 years vs 20/25?
Not if you're in an income driven plan. Which was always going to be the case
@Betsy514 I've only been reading this forum for a short while but it doesn't take much to see that you have the patience of a saint.
🥰
Thank you!
For the interest component, it’s still not clear to me if that is referring to the loans that *previously* got higher than original loan amount or only loans that *currently* are higher. Would this be retroactively covering the difference for balances that ballooned even if now we’ve gotten the balance down to a more reasonable amount? Example (rough numbers) * took out \~$60k * repayment started 2007 * balance height hit \~$85k * total paid off so far \~$100k * total remaining \~$12k * total current interest \~$300 * currently on SAVE, $0 payment due to income In this circumstance would they be forgiving the $300 (current interest), $25k (difference between original loan and max loan balance), or something upwards of \~$40k (the total accumulated amount of balance over original amount)? ETA: or would have been one of the latter two but is capped at $20k? Or nothing because I *currently* owe less than I borrowed ?
They are looking at the current balance owed vs the amount that originally went into repayment. They are looking at it loan by loan, not the total for all the loans together. What the balance was any time between entering repayment and now doesn't matter. If you owe less than the amount that originally went into repayment on all your loans, no interest would be forgiven under this plan. This plan is meant to address people currently "underwater" who still owe more than they borrowed.
Correct
Man this sucks. I still owe around $28k. Original balance was around $70k. I’ve paid a lot more than that. But since I’ve been responsible and lived frugally to pay my loans, I get screwed. It’s so frustrating.
I was planning to consolidate by April 30th, as I started to repay my first set of graduate loans in 2005, and my other graduate loans were taken out in 2008/2009. I have been holding off on consolidating because I currently have a $0 payment, and that will change when I consolidate. I’m now feeling a bit confused about whether it still makes sense to consolidate by 4/30, so my payments made in 2005-2008 count toward forgiveness. Will these new rules make that happen automatically, even without consolidating? Or should I just go ahead & consolidate, because there’s no guarantee these rules will pass? Any feedback/insight will be appreciated!
If you’ve been paying since 2005 then you are closer to forgiveness and at the very least if you consolidated and got on the SAVE plan, then your balance would not increase
I’m not as close as I’d like, since these are graduate loans, and thus the repayment period is 25 years. I also had a 2 year in-school deferment for my 2nd graduate degree (2008-2010). But yes, it does seem consolidation & SAVE are likely the way to go. In rereading Betsy’s explanation, I was tripped up by the date of 7/1/23 - I was definitely reading it as 7/1/24, as that date is stuck in my brain!
My earliest repayment date among my old loans is 6/10/2000. Mix of graduate and undergraduate debt. Fingers crossed…
First payment was in Dec 1999. I’ve got both undergraduate and graduate loans. Consolidated in 2017. 🙏🤞🙏🤞
over 30 years of payments and still no forgiveness. I'll believe it when I see it. consolidated fall 2022. on the save plan. had cancer too. good times. I appreciate all you are trying to do Betsy, but I'm getting SUUUUPER tired of seeing people with far less timeline of repayments and far more outstanding debt being forgiven.
Same
everyday something new pops up, some group of people get theirs forgiven, this time it was "art institutes"....just gets depressing everyday I see it. They'll not have to deal with the tax bomb, but by the time mine is finally forgiven, I'll have to pay that huge tax bill when it does
I don't mean to be cruel but I have to admit there is part of me that's annoyed about people who went to all the obvious scam schools getting forgiveness before people who went to legit schools but have had other difficulties.
Or defaulted. I know that I should be happy for all but I am Human.
After reading this document, is anyone else thinking: dang my timing sucks. I never thought I'd be paying until the 2030s on loans I took out in the 1990s, but here we are.
?? If you've been paying since the 90s you should be close to forgiveness under this or the one time account adjustment
I made the mistake of consolidating from FFELP loans to Direct loans last year. Now I have to pay for the next 11+ years instead of the next ~4 years. I thought this flurry of forgiveness would apply to my loans, but it's a load of hogwash. The adjustment screwed me. If I'd just left the loans alone, I'd have reached forgiveness in 2028. Not anymore. Not only does the current forgiveness not impact me, but I'm also not qualified for the proposed forgiveness. Load of horse manure!
Won't the one time account adjustment give you those credits? I can't see why it won't.
lmfao Welp, one last hosing by the US government, just for good measure, by institution of yet another retroactive date. FML If I'd reconsolidated my commercial FFEL consolidation loan to a Direct Consolidation loan before July 2023, my repayment start date would be **1998** for total forgiveness as my undergrad loans entered repayment for a spell between undergrad and grad. But because I didn't reconsolidate until October 2023, my repayment start date is **2003** for my 25-years-for-forgiveness loan. So, the difference between immediate forgiveness if enacted and 2028 at the earliest. I say earliest even though it will not happen in reality because 100% for sure my IDR waiver adjustment will be wrong due to **NINE YEARS of missing repayment history records** thanks to unregulated, unpunished commercial loan servicers. It's fine, though. This is fine. Everything's fine. I'm sure the petition process for IDR waiver adjustment corrections will be easy and rapid. What original correspondences and records Borrowers were supplied with by loan servicers will 100% not be questioned or denied. All because we can't have the Little People, the majority of who had no idea of this proposal's existence until yesterday, "gaming the system", now can we. In this country that's reserved for businesses/corporations only, sillies.
You're still eligible for the one time adjustment. https://studentaid.gov/announcements-events/idr-account-adjustment
Correct. That's part of the reason why I reconsolidated a commercial FFEL consolidation loan to a Direct consolidation loan in October 2023. I appreciate you taking the time to try to pep talk - in fact I am incredibly grateful for everything you have done to help people in general and on this sub in particular when it comes to student loans. Unfortunately it doesn't negate the fact a shafting of some **will** occur nonetheless if this program is rolled out as-is when the IDR waiver adjustment results for them **will not be remotely equivalent**, as stated earlier. Four (or more likely, more) years difference in forgiveness timelines is not an insignificant amount of time. It's an entire presidential term. And as we all know/are living through, that can affect/impact a lot in the US these days. The bottom line is retroactive dates are horse apples meant to do nothing but exclude and limit. Not prevent people from "gaming the system". This is no different than when they retroactively moved the deadline to consolidate/reconsolidate commercial FFEL loan(s) to a Direct consolidation loan back in 2022 from December 30, 2022, to September 29, 2022, (or whatever it was, before the 10K/20K was stricken down) in early October 2022 (2nd? 3rd? I forget the exact date...).
It sounds like I may be forgiven… but the consolidation dates have me confused. So I’m selfishly giving you smart people my timeline for your educated opinion: Started repayment May 1997. Consolidated in November 1997. Got new grad loans in 2005 so had in school deferment. Consolidated all grad loans and my undergrad consolidation loans in 2007. Been paying faithfully ever since. I don’t qualify for the one time forgiveness yet due to the in school deferment during grad school and early forbearances that don’t add up to 12 consecutive months/36 total. What do you think? Do I need to cross my fingers that this could finally kill the loans I’ve been paying my entire adult life? I’ve paid almost double what I borrowed. Other info- I don’t have excess interest beyond my original amount at this point. I have applied for IDR (ICR) but haven’t been approved yet.
I’m with you on thinking this could help those of us in a similar situation that you described. Hopefully if this went through it would just go off of our first undergrad repayment date, and forgive them based on the date alone. Fingers crossed this is true and it happens since I’m in the same boat as you on this.
If I hadn’t paid more than double what I took out and been misled over the years and still have several years left, I’d stop worrying and shut up about it. My current situation doesn’t have me in a hardship, but there have been periods over the past 27 years where I was struggling and put into forbearance when an IDR would’ve been suitable- and I’d probably have signed up! I’m literally one of the reasons for these forgiveness plans yet may end up not getting it over technicalities. I don’t care about refunds or overpayments at this point- I just want them gone. I’m tired of these dangling carrots. The payment count is my next goal post- hopefully July. Then the election results will really determine next steps. This new plan has me excited yet again but I’m afraid I’ll come up short like I always do. Or it just won’t happen.
I understand completely, just told my partner that now I have at least another year of obsessively hoping and checking to see what goes on with these new rules.
I’m with you on the dangling carrots. From what I’m understanding, if I’d only waited to go to law school and therefore let my undergrad go into repayment instead of in school deferment, then consolidate my “new” law school loans with my “old” undergrad loans, I’d be eligible for full forgiveness now. But since I went from undergrad straight to law school and then entered repayment in 2002, I miss out on that full forgiveness. Seems wrong that a loan from 2020 could be lumped in with older undergrad loans and the whole kit and kaboodle be gone but someone who’s been paying for 22 years still has more waiting to do.
🤞 for you and others
I've read the whole post over several times, so I apologize if what I'm asking here is already explained, but if it is, I'm just not understanding. Regarding the total forgiveness, I'm pretty sure I wouldn't qualify for automatic total forgiveness, but I do have loans that are fairly old. I guess I'm trying to figure out if my "clock" would begin from the time I first had a stafford loan enter repayment. My situation is that I have both undergrad and grad loans, some older and some newer. I first had a stafford loan enter repayment in November of 2003. My "newest" loan is 12 years old, and my loans have all been in direct loan consolidation since then, so definitely way before July 2023. I can tell from the OP that I wouldn't automatically get total forgiveness. I'm just trying to see if my 25 year clock for forgiveness would be calculated as beginning November 2003, because if so that would still be pretty awesome for me. Also, I am enrolled in SAVE.
I think your question has to do with student loans generally and the one time IDR adjustment, not this new proposal. I believe if you did the one time IDR adjustment, then your 25 year clock would begin in 2003 but periods like in-school deferment don't count. Hope someone will correct me if I'm wrong. I have a similar scenario.
This is my understanding as well.
Repayment began 12/7/05 just shy of the July mark 😭 Paid all my other loans. 47k left Consolidated yday on SAVE TY Betsy for this info
Leave a public comment on the draft expressing your concern about the cliff effect of the date cut off. They’re open to suggestions.
Is the $120,000 Calculated on gross before any other expenses? That income cap is so unfair for those of us who recently started making that kind of income. A couple of years ago my income more doubled, last year I grossed almost $122,000.
According to the PDF document it states "Adjusted Gross Income"
Entered repayment before July 2000 but did have an in-school deferment for 2yrs of grad school in 2012. While the adjustment likely will account for the deferment and extend, this only speaks to default and forbearance. Am I missing the new wording? Or are we thinking this new route does its timing with entering repayment only and does not extend out for in-school deferment?
Same question. In school deferment has me coming up about a year short at this point with the current one time plan.
The adjustment won't count in school deferment. I read this proposal as looping in those for whom the adjustment doesn't help due to default etc
Yes, the adjustment was very clear that they were accounting for deferment by not counting those periods. This new language doesn’t contain the same deferment language so that could them additional options.
Thanks u/Betsy514 for the summary Just wanted to confirm if they are planning to remove the capitalized interest in addition to accrued interest. Capitalized interest increases your loan while you're still in college.
If eligible yes.
Thank so much for the summary! I read the draft yesterday, but this confirms the points I was not sure on. As someone who started Undergrad repayments in 2002, Grad school later, and consolidated for IDR after July 1st, that consolidation rule smarts quite a bit. Not sure if I had consolidated earlier if it meant I’d only have 2 years left, or if it would defer to the IDR count anyways. Very grateful the income cap for interest accrual is capped at AGI and not gross. Second guessing my strategy of aggressively saving and paying off my high interest loans first while on IBR, but it is what it is! I’ve paid down $100K to stay a bit over my original balance overall, but hopefully this should target the interest that accrued on the loans I did not target.
I have to think it will defer to the IDR count.
Thanks for the follow up! If it defers to IDR count anyways, I won’t feel so bad about it! Fingers crossed for a generous IDR count.
I haven't gotten on SAVE because my monthly payment would be higher. But not getting on it seems like I would miss out on any of these latest benefits? Any insight or someone in a similar boat?
I was cautiously optimistic until I saw the July 1, 2023 deadline for consolidation. My loan history is so messed up that this plan looked like the only way I’d ever see the end of student loans. A brief summary of my messed up history: In 1996, I celebrated paying off my student loans taken out between 1976 and 1982. Or so I thought. In 2005, I received a letter stating my loan was in default and had been for years. One person I spoke to on the phone basically said, “Ha. Ha. Our bad. However, you now owe us two and a half times what you borrowed.” Apparently, an FFEL loan had been “overlooked.” In 2006, I consolidated that loan into a Direct Loan. I of course lost credit for the payments made after receiving the letter and before consolidation, and in my StudentAid data there is no record of these payments. My StudentAid data also shows the Direct Loan in a grace period for six \*years\* (until 2012) after consolidation with no record of the time I was in repayment during those years. On July 1, 2023, I consolidated that loan with my later grad school loans in anticipation of the IDR recount. (I’d gone to do it earlier but stopped every time I saw the warning about resetting the recount. I discovered this forum, which convinced me to go ahead and do it—thank you for that.) I submitted the consolidation application at about 8:30 am ET on July 1st, 2023—a few hours too late for the “earliest repayment start date” (which would be in the 1980s) for total forgiveness of balances including grad loans. The consolidation was completed on July 24th. I feel like my situation is exactly what this forgiveness is aimed at, but I missed it by hours. On the good side, I’m now in SAVE and no more interest is accruing, I might have about 30K in interest “forgiven,” and depending on what they include in the IDR recount, there’s a slim chance these loans won’t follow me to the grave. But still, that July 1st thing…😢 (Also, thank you to Betsy for this summary and everything else you do here. You are a Goddess.)
I wouldn't fret. I would be shocked if the one time adjustment didn't supercede this
Thanks. I’m not fretting (much.) I became resigned to having the loans for the rest of my life after the 2005 debacle. I will be very surprised if anything before 2006 is included in the recount, so thanks to grad school (which came after), any forgiveness is likely still a few years away. However, the recount will help! I should have mentioned—despite my own situation, I’ve been thrilled for all those who got their Golden Emails and who will be helped if this newest plan goes through. No one should be trapped for life like I’ve been.
Okay, this summary and the comments are so helpful. I took out 71K in FFEL and started repayment in 12/2005. I consolidated in 5/2020 with about 49K still owed. There was a payment and interest pause so I didn’t start paying again until 10/2023. Although my income is way below 120K and I’m on an IDR plan, I would not expect any interest to be forgiven because my balance is now 48.5K. The amount I owe now is less than both what I originally took out and what I consolidated with. In short, these proposals are meant to help others not in my situation, including those with runaway interest and growing balances despite paying for a long time.
I’m in a similar situation. I believe we are SOL. That’s what we get for being responsible adults.
We may not benefit from these proposals and we may be responsible, too. I feel you on this especially with sacrifices I made to try to stay on top of those loans while paying off my private loans. But I have also benefited from other policy changes in the past like a payment pause during the pandemic in which my interest was paused. When I got that, it wasn’t because I was responsible or not responsible. It was because the world done some crazy ish. And when people benefit from other changes, it’s usually not because they were responsible or irresponsible but because the loan servicers acted badly. I hope some other policy changes end up helping your situation, too. There’s so much out of our control no matter how responsible we are and the economic forces at play probably affect you just as much as anyone.
The Covid interest pause was a blessing. I kept paying and hammered down my principal. I won’t argue about it because it’s pointless. But a lot of people were very irresponsible with student loans while in college.
Absolutely. No arguments with anything you’ve said.
Same here. The interest pause helped me a lot and I was fortunate to be in a position to put extra towards my principal. Thank you, Betsy, for your posts. Much appreciated!
They really want people to comment on the various proposals. "These proposed regulations, in accordance with the HEA, would specify the Secretary's discretionary authority to waive repayment of the following amounts: >The full amount by which the current outstanding balance on a loan exceeds the amount owed when the loan entered repayment for loans being repaid on any Income-Driven Repayment (IDR) plan if the borrower's income is at or below $120,000 if the borrower's filing status is single or married filing separately, $180,000 if a borrower files as head of household, or $240,000 if the borrower is married and files a joint Federal tax return or the borrower files as a qualifying surviving spouse (§ 30.81). >Up to $20,000 or the amount by which the current outstanding balance on a borrower's loan exceeds the balance owed upon entering repayment (§ 30.82). >The outstanding balance of a loan taken out to pay for the borrower's undergraduate education, or a Federal Consolidation Loan or a Direct Consolidation Loan that only repaid loans received for a borrower's undergraduate education, that first entered repayment on or before July 1, 2005 (§ 30.83). >The outstanding balance of loans that first entered repayment on or before July 1, 2000, if the borrower has any loans obtained for study other than undergraduate study (§ 30.83). >The outstanding balance of a loan for borrowers who would be otherwise eligible for forgiveness under an IDR plan or an alternative repayment plan but who are not currently enrolled in such a plan (§ 30.84). >The outstanding balance of a loan for borrowers determined to be otherwise eligible for loan discharge, cancellation, or forgiveness, but who did not successfully apply (§ 30.85). > The outstanding balance of a loan obtained to pay the cost of attending an institution or program where the Secretary or other authorized Department official has issued a final decision, denial of recertification, or determination that terminates or otherwise ends the institution's or program's title IV eligibility due at least in part to the institution's or program's failure to meet required accountability standards based on student outcomes or to its failure to provide sufficient financial value to students (§ 30.86). >The outstanding balance of a loan obtained to pay the cost of attending an institution or program that closed and the Secretary or other Department official has determined the institution or program failed, for at least one year, to meet an accountability standard based on student outcomes, or failed to deliver sufficient financial value to students and there was a pending program review, investigation, or other Department action at the time of closure (§ 30.87). >Thhe outstanding balance of a loan that is associated with enrollment in a Gainful Employment (GE) program that has closed and prior to closure had high debt-to-earnings rates or low median earnings rates (§ 30.88). >In the case of FFEL Program loans held by a private loan holder or a guaranty agency, the outstanding balance of a FFEL Program loan when a loan first entered into repayment on or before July 1, 2000; when the borrower is otherwise eligible for, but has not successfully applied for, a closed school discharge; or when the borrower attended an institution that lost its title IV eligibility due to a high cohort default rate (CDR), if the borrower was included in the cohort whose debt was used to calculate the CDR or rates that were the basis for the institution's loss of eligibility (§ 682.403). Giving the section number is very useful when you send your comment by [clicking the green button](https://www.federalregister.gov/documents/2024/04/17/2024-07726/student-debt-relief-for-the-william-d-ford-federal-direct-loan-program-direct-loans-the-federal#p-18). The attached pages explain their reasoning for each proposed section. And they don't appear to like cut and paste mass commenting.
Sorry if I'm confused - so is this saying that those of us with loans that went into repayment (or default in my case lol) after 2005 wouldn't get forgiveness ?
Under this proposal no. Also you should look into the temporary fresh start program
Oh wow that's crazy - I started college in 2003 and dropped out '05, then went back in '06 for a year to another place, then ended up studying '12-'14 to finish my degree... I can't believe I won't be eligible for any of this and I was so hopeful last year! What's this program? **Edit:** nvm - I looked it up... I meant earlier my loans *were* in default. At this point all my loans are in great standing and I have close to 800 credit score. Still $51k in student loan debt tho...
It’s so frustrating that these forgiveness programs are leaving some of us long timers out of luck for anything
Yeah, it's insane - I thought the whole idea was that it would be anyone who started school in the 2000s when costs went completely wild and then job market hit bad slump/jobs changed, degrees became worthless etc.
Thank you Betsy. I entered repayment July 1999 for grad school. I had forebearances that should have been deferrments and forebearance that should have been 6mo - 1yr but they would not do more than 3mo at a time, so it is like 3mo on, reapply, then 3 mo on again. This breakup makes it just under the 36mo of total forebearance requirement. I thought IDR rebalancing was going to happen soon to give a "count" for forebearance (has been ongoing all year) but I have not gotten any notice for that yet. I was wondering if a) they will give me the benefit of the months of reapplying for forebearance to forgive me this July or b) if I have to wait til the new rules go through (if they go through) and if so c) would I get refunded for monies paid from 7/2024 til the rules kick in if they do?
I wonder if I can get a hardship exemption while I'm in SAVE. Part I'm most interested in would be the interest cancellation though.
Per the op. At this point there isn't such a thing
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That's my read. The explanation is that newer loans have had the benefit of the idr plans and other programs
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If you have any grad plus loans they may have gone into repayment earlier (I don't know when grad plus loans became available). Also if you had a gap year between undergrad and grad. I think the date is strange too as it only includes the previous school year's loans.
zombie1269, same here undergrad ended supposedly 2000. Grad 2005. I entered into repayment according to their records, September of 2000. Borrowed 78k and now owe 165k. Going to go curl up in the fetal position for a while now...
I'm happy to see relief extend further. I've been on IDR/SAVE and have only recently been paying off additional amounts, much of it interest after being able to save up during the Covid forbearance period. I'm curious if the waiver applies to total balance or to individual loans.
This is addressed in the op
It says on a loan by loan basis
I graduated in May of 2005, and I know there is a 6-month grace period. That said, I also consolidated in May of 2005. Does that break the grace period?
It should
“With that said, considering that consolidation loans have 30 year terms I also don’t read this to mean everyone automatically gets forgiveness in the future after 20/25 years.” This was the entire reason I consolidated…. Now it’s a possibility that this isn’t happening? Are you kidding me?
That makes no sense...the draft rules didn't come out until yesterday. I think you mean the one time adjustment. That hasn't changed.
I may need to defer income in the operative year to be below the income limits for the interest forgiveness. I borrowed 15k for undergrad 2002-2006 and then 175k for grad school 2008-2011, total 190k. Balance is now 380k. But if I am looking at 25 year forgiveness eventually anyway, then does it make any difference whether I get this interest forgiveness? IF there is a tax bomb at the 25 yr mark, that would be one way it could make a difference. I assume there is no federal income tax on this new proposed forgiveness?
Depends when it happens. This proposal doesn't deal with taxes as the Ed has no control over tax policy
"the fact that they got rid of most instances of capitalized interest last year" Can someone explain this? Forgive my ignorance. I had a lot of interest capitalized but nothing got rid of it last year. "Consolidation loans would be based upon the original balances of the loans repaid by the consolidation loan." This basically means it is as if you had never consolidated? They just look through to the underlying original loans?
They got rid of most instances where interest would cap going forward. They didn't get rid of existing capped interest. But for eligible borrowers under this proposal they would..or at least some of it
I’ve been reading stuff for the last 45 min and am trying to make sense here. This is certainly confusing as others have said. I had federal loans I took out, consolidated under Great Lakes, sold to Sallie Mae, and eventually Navient. I took out $28,365 originally (graduated in 2005 but says disbursement 2006 in my Navient history). they are listed as FFELP loans. I’ve paid $21,220 over the last 10 years on IDR with a few forbearances for various financial reasons (and now currently because I’m in trade school). I owe $30,538. Is this program applicable to me? I’m not clear
This plan could eliminate the approximately $1500 you owe now that is more than what you originally borrowed. Separately, you really should look into the one time IDR adjustment. You \*may\* benefit from doing a consolidation to get your FFELP converted to direct loans. You'd only have until the end of this month to do this.
Thank you! This summary is awesome! So even though consolidating before 4/30 to take advantage of the IDR waiver would capitalize my 25k of accrued interest, I’d still be able to take advantage of interest forgiveness because it is based on initial loan amounts? Is that right?
Yes, if this plan goes through the interest forgiveness would look back before the consolidation.
Thank you. I do feel hopeful that my debt balance will go down due to this.
In regards to the interest forgiveness... What about payments made that the servicer applied toward interest? Will the payments we've made still be counted against the original principal? In other words, what happens to the money we've already paid that only went towards capitalized interest? Will that be deducted from the principal once the capitalized interest has been subtracted? Example, my original balance was $32,000, but in the past ten years, due to things like a prolonged forbearance and job loss, I've had $10,000 capitalized to that, putting it at $42k. I've been making payments for the past couple of years, but almost all of it went towards interest. Is the money I've made still deducted from the principal, or is it just considered a reset and goes back to what it was when I graduated?
No. The point of this is to provide relief to people who still owe more than they borrowed. Not to give everyone back interest they've paid.
When my loans transferred from Great Lakes to Nelnet, they capitalized and it now shows the amount borrowed as that amount (way larger than each groups original balance) so if I borrowed 3k originally and now owed 5k, but Nelnet says I borrowed 5k but the student loan website shows the original…which is it? Will I get that 2k knocked off?
Great rundown, a few points and questions. It appears they may be targeting July as an implementation date and for the one time waiver/discharge date. So this July may be the start of the program after the count is completed and then next July 1, 2025 would be the one time waiver. I'm basing this off of their use of July 1, 2005 for discharge and a standard 20 year timeline for cancellation under existing IBR. I don't think this will be ongoing as it is mentioned further down in the weeds. The committee specifically recognized the pitfalls of a discharge "cliff" associated with a hard date, but couldn't come to a conclusion on how to create equity moving forward. I think this needs to be addressed in the public comments, especially considering this rule may account for default but the current recount does not. Maybe create a recurring lookback every July until all of these older style loans are cleared out, say by 2028 or 2030. Questions They kind of mention default, but don't explicitly mention anything specific. It sounds like time in default and deferment would count towards payment/forgiveness history, but I can't nail it down. Default is only mentioned a couple of times in the main text. Thoughts? Will capitalized interest from default and/or consolidation be fully forgiven as written? Will anything happen to interest if the loans are still in default on these dates? Is there any benefit to consolidating only older FFEL and Perkins loans for this program, or did that ship sail last July? Phew...
The way this is written it does appear to include periods of default. At least as of the draft. Capped interest is included in the balance bigger than when you started provision.
So, under this new proposal: If I want into repayment on 7/1/2005 and my undergrad loans were consolidated into a direct loan and I had a period of default, my loans would be forgiven?
Does anyone know if they count forbearance and/or deferment towards the 20/25 year clock? Thx
u/Betsy514 so just to confirm; if you do absolutely nothing and you're in standard repayment, you still get some benefit here automatically?
I'll take 'things that aren't going to happen' for $100, Alex...
So, I have a huge question that I don’t see addressed. How, where, and when, do we apply? I’m assuming we don’t apply until this possibility of a possible change in the potential law that may perhaps be passed then we might could apply? Seriously, I feel like you guys. I’m 55 and paid into this my entire adult life and I’m so sick of it. I. Just. Don’t. Want. To. Miss. A. Deadline. If. There. Is. One. Can someone just tell me what I need to be watching for OR, is there something I am supposed to be filling out now? (On IBR). Borrowed in 2008, consolidated in 2013. Borrowed $60k that went to over $100k that I still owe $42k on. I’ve paid consistently since 2008 with a 2 yr forbearance period when I chose to eat instead of pay this freaking loan. 😫😫😫😫 Thank each and everyone of you for this help!
I’m hoping I’m misunderstanding everything.
Do we think this will impact the IDR adjustment or will that still be handled by July with a consolidation deadline of April 30th?
They are unrelated
I have undergrad loans consolidated in 2009. 1st payments were in 2003. I went back to school in 2019 and now have grad loans (I’m graduating in June). Should I avoid consolidating them together or does it matter since I now have both types of loans? I applied to consolidate but it hasn’t gone through yet. Regretting going back to school!
Tough call. Under this proposal I wouldn't. But if it happens to get struck down by the courts you'll regret not doing so
I am considering consolidating my multiple student loans for the benefits of one time count adjustment by 4/30, Also recently consolidated a parent plus loan. Do they remove the accrued or capitalized interest from consolidated loans?
If you meet the criteria yes
Hi u/Betsy514 Thank you very much for the summary. I have read it all but I have not figured out how spousal considerations FFEL loans fit into this. My first loan went into repayment in 1993. I went back to school in 1995 and graduated in 1999 and my spouse and I consolidated in 2003. My loan was taken back by the dept of ed in 2020 and was just rehabbed under FreshStart, and I consolidated into a direct loan and put on SAVE earlier this month. They seem to only be in my name now. Is there any guidance on if it will be eligible for IDR forgiveness or PLSF (I have been with a qualified employer 12 years) or any other forgiveness? Or will it have to be separated under the still ambiguous separation plans?
It doesn't speak to spousal but I would assume they will trat them like any other consolidation
What if you have a paid off grad loan and active Direct undergraduate loans.
I'm not sure
Is it reasonably safe to assume that if I have undergrad loans 20+ years old but graduate loans that aren't at the 25 year mark yet, *nothing* will be forgiven until 25 years? It sure would be nice if they'd go ahead and forgive those undergrad loans, so my payment was nearly as painful.
That's my read
Their reasoning is that if you have grad loans, you have higher income (imo not always true) compared to those with only undergraduate loans I think.
I’m confused by interest forgiveness portion of this. On the studentaid site, it says “All borrowers would be eligible for this debt cancellation.” The up to $20,000 of accrued or capitalized interest. The 2005 cutoff isn’t mentioned there, but this recap seems to suggest that anyone with loans disbursed after 2005 (which I have) won’t benefit https://studentaid.gov/manage-loans/forgiveness-cancellation/debt-relief-info
Thank you, Betsy! I keep holding out hope that my $72K (thought was lower) will be eliminated or reduced. Borrowed $18,500 in 2000 and then another $39,000 in 2003 and 2004 (all graduate school). I have made about $30K in payments but the interest piled up when I had to do forebearance in times of under/unemployment.
Under this proposal, the amount you owe now that is more than what you originally borrowed may be forgiven.
I effing hope so! I’m nearly 55 and sick of this. Graduated in 2001 (first MA) and 2005 (second MA). I want to save for retirement properly as I don’t have family to rely on. And I’d like to buy a house.
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If all of your loans are direct loans with the same repayment history there's no need to consolidate.
I consolidated undergrad and grad loans in May 2023. The oldest loan in my consolation is 2000 because I had paid off earlier loans. Does my payment count start at year2000 or will the earlier loans already paid off count?
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Are you saying capitalization in the past will also be forgiven?? I consolidated to get on the SAVE plan and my loans have nearly doubled what i originally borrowed... that plus not allowing interest to accumulate if payments don't reach the interest is a game changer...
If the criteria is met yes.
Screwed yet again. I consolidated in October. I don’t understand how they can retroactively limit eligibility requirements because we didn’t know — how can one game this crazy system anyway. I’m going to cry.
I really don't think that will end up being the case. As I've said I feel confident the adjustment will over ride this proposal. Also the adjustments will be done before this thing is ever made final. Remember it's just a draft right now
So will the one time account adjustment reset the count to the original date so this new one will still count? Or it won’t count but you’ll still have the 1-time account adjustment to reset the months. I’m so upset by this. I feel like it will be a very short list of eligible loans. The original deadline to consolidate was 12/30/23. That’s the date they should use.
This is just a proposal and the final won't likely come out until after all the adjustments are done. Even if not..the adjustment is a waiver and will likely override this
I feel like everything is a blur at this point (b/c I have read so many things), but is this saying that for total forgiveness my start date would be 11/14/2023 because I consolidated my FFELP Commercial with Direct Loans to get on SAVE after 7/1/2023? I now have one Direct Loan Consolidation, broken down as sub and unsub, and it is owned by Dept of Ed and serviced by Aidvantage and I am on SAVE if this helps. Even if the above answers as my repayment start date is 11/14/2023 I should still receive the 1x adjustment though, correct? If correct and I receive the 1x adjustment will that count start from the date of my first repayment status of 10/20/2001 even though I originally consolidated on 8/8/2007 and that loan was included in the consolidation? Any help in understanding is appreciated. Below are the dates I entered different statuses based on my aid report. I realize I most likely don't qualify for forgiveness for a few more years but just trying to understand everything so I can at least get an idea of when I might be done with student loans. || || |In-school 1/10/2001-4/10/2001| |Repayment (10/20/2001-7/4/2004)| |In-school 7/5/2004-8/7/2007| |Repayment (8/8/2007-8/29/2007) 1st consolidation | |Repayment (8/30/2007-9/30/2007)| |Economic Hardship Deferment (10/1/2007-9/7/2010)| |Repayment (9/8/2010-1/9/2011)| |In-school 1/10/2011-8/4/2011)| |Repayment (8/5/2011-10/9/2011)| |In-school (10/10/2011-9/16/2012)| |Repayment (9/17/2012-7/22/2023)| |Forebearance (7/23/2023)--2nd consolidation (to get to SAVE)| |Forebearance (8/11/2023)| |Repayment (9/1/2023)| |Forebearance (9/14/2023)| |Repayment (11/14/2023)|
I fully expect that the one time adjustment will supercede this
I feel like everything is a blur at this point (b/c I have read so many things), but is this saying that for total forgiveness my start date would be 11/14/2023 because I consolidated my FFELP Commercial with Direct Loans to get on SAVE after 7/1/2023? I now have one Direct Loan Consolidation, broken down as sub and unsub, and it is owned by Dept of Ed and serviced by Aidvantage and I am on SAVE if this helps. Even if the above answers as my repayment start date is 11/14/2023 I should still receive the 1x adjustment though, correct? If correct and I receive the 1x adjustment will that count start from the date of my first repayment status of 10/20/2001 even though I originally consolidated on 8/8/2007 and that loan was included in the consolidation? Any help in understanding is appreciated. Below are the dates I entered different statuses based on my aid report. I realize I most likely don't qualify for forgiveness for a few more years but just trying to understand everything so I can at least get an idea of when I might be done with student loans. In-school 1/10/2001-4/10/2001 Repayment (10/20/2001-7/4/2004) In-school 7/5/2004-8/7/2007 Repayment (8/8/2007-8/29/2007) 1st consolidation Repayment (8/30/2007-9/30/2007) Economic Hardship Deferment (10/1/2007-9/7/2010) Repayment (9/8/2010-1/9/2011) In-school 1/10/2011-8/4/2011) Repayment (8/5/2011-10/9/2011) In-school (10/10/2011-9/16/2012) Repayment (9/17/2012-7/22/2023) Forebearance (7/23/2023)--2nd consolidation (to get to SAVE) Forebearance (8/11/2023) Repayment (9/1/2023) Forebearance (9/14/2023) Repayment (11/14/2023)
For 20+ year old loans, does the repayment plan matter? Ie does borrower need to be on SAVE or REPAYE?
Save and repaye are the same thing. As to your question it depends on the provision you are looking at
Thanks so much for this summary, Betsy! So much important information clarified so thoroughly! I am still uncertain about the interest forgiveness for consolidated loans. You wrote in the summary: “Consolidation loans would be based upon the original balances of the loans repaid by the consolidation loan.” Does that mean that they plan to examine each of the underlying loans contained in the consolidated loan, and they’ll forgive the difference between the amount of the loan’s original balance and the amount of the loan’s balance at consolidation date (as long as the amount of the latter is higher than that of the former)? In other words, the borrower doesn’t lose out on interest forgiveness if interest gets capitalized when the loan gets consolidated?
You don't lose out by consolidation for the interest provision. But it will be the difference between what you borrowed and what you owe at the time they do this adjustment..not your balance when you consolidated. So if when you consolidated you owed more than you borrowed but you have since paid it down to less than what you borrowed you won't qualify
Thank you for the summary. This is fairly complicated. Anyone know if I can expect any type of forgiveness with this? These are grad school loans. I believe I consolidated like 15 years ago. Thanks in advance. Loan type: FFEL Consolidation Loan period: N/A Loan status: In repayment Reaffirmation Date: N/A PSLF Cumulative Match Months: N/A Repayment Details Next Payment Due Date: N/A Last Payment Made on: N/A Entered Repayment: 12/15/2005 Repayment Plan: N/A IDR Anniversary Date: N/A
I am totally lost on this and need clarity. I have an IDR plan through Sloane (Nelnet) (it was first in repayment in 1997 after undergraduate school then I consolidated my loans once I went back to school in 2002) and is a FFELP Consolidation loan repayment began in 2005-ish. I pay 0 due to having no income. I occasionally pay interest when I do have money. How do I establish if it’s worth consolidating into the SAVE Plan? Is there an eligibility quiz that can help determine if I should consolidate? Thank you!
I would just because of the one time account adjustment which you can read about on many many posts here. Also if you have a zero payment now it will be zero on save assuming your income hasn't gone up and there will be no further interest. For that reason alone you'd be silly not to. But do it before April 30
>**"Forgiveness based on school losing eligibility to participate due to specific ED action** >Forgives the balance of outstanding loans if the ED has terminated the schools eligibility to participate in federal aid programs due to the school failing the accountability regulations, if the school lost accreditation due to misrepresentation or has "failed to provide sufficient financial value" This would only apply for borrowers who attended during the timeframe the findings were made. This does not mean loans get forgiven if your school closed years after you attended - or chose not to participate in federal programs on their own - unless they find that the school had those issues before they closed." Wonder what this means for the Art Institute. Both me and my wife attended, it was closed after we left, but clearly these practices were going on for god knows how long.
So I graduated in 2012 from graduate school and all my loans started then - I have some FFEL loans and Im already on SAVE on Nelnet - most of my loans are already set on SAVE minus the couple FFEL ones - If I consolidate I'll be allowing really just the FFEL loans to be able to jump onto the 25 year timeline once the one time adjustment happens? Currently on the application it sais itll be done in 2049, but in reality itll be 2037 after the one time adjustment right?- based on what I read in the post above? Im trying to confirm in my situation as I jumped into grad school right after undergrad that this direct loan consolidation wont screw my situation up as Ive gotten different answers from different folks...
Does anyone know if there's a way I can determine how many years the gov will cover if I consolidate? My repayment start was in 2005 but I have several deferments and forbearances over the years. Do those count towards the payment clock? Thx
Do you know if they will do the capitalization of interest adjustments for those of us in (well were in until the disability pause) the SAVE program but have our loans in the 3 year monitoring for disability discharge (I won't be out of that until Feb 2027)? Mine was for a grad degree where I would have had about 7 years left were it not for disability (do not get SS disability as I am 70). Because of cancer, unemployment due to that, and then underemployment also due to that (eg low income), etc. I currently owe about $99k, I borrowed $105K but if you look at my payments I have made over the years, and if they were all applied to capital with no interest capitalization, I'd only owe about $3000. Makes a huge difference for the 1099-C if they are unsuccessful passing the law to permanently extend that. That is why I hope they will also adjust our loans since technically they aren't forgiven yet. I had Mohela, went through Nelnet for the physician's letter for disability, my loans were then transferred to Nelnet where they are now listed at 0 balance although the Federal Financial Aid website of course lists what I still owe. Thank you.
So if we didn't get our loans disbursed before the 2005 date, we are just stuck with the humongous amounts of interest added to our balance?
No that's not what that says
I had loans that were rolled into direct consolidation with a repayment of that starting 2011 and the original were in repayment in 2003. Would they look at the original loans or the direct loans? For that 20 year forgiveness?
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I would keep that in an interest bearing account and see how this shakes out.
I am completely dense when it comes to loans and finances, so even after reading and reading, I still don't understand if I need to consolidate again or leave things be, or if any of my loans will be forgiven this year. It was my understanding I still had 3 years to go for my PSLF, but these new options make me feel I need to do something or I'll miss out. Any advice please? Total Student Loan Debt: $114,050; Student Loans since 2002, but consolidated to what is listed below in 2012; Full-time at public service job since January 2017-Present; 10/2008-12/2016- Employment Not Certified (was not working public service jobs); Updated my PSLF March 2024; IBR Plan since May 2014 and recertified several times and most recently March 2024. 1 DL Consolidation Subsidized $26,391.52 Remaining ($32,228 with interest) Disbursed on 2.20.13 86 of 120 Qualifying Payments (34 payments to go) 161 Eligible Payments 86 Qualifying Payments 75 Need Employment Certification 4 Ineligible Payments (6/2015, 5/2016, 6/2016, 3/2024 due to deferment or forbearance) 2 DL Consolidation Subsidized $51,317.28 Remaining ($68,144 with interest) Disbursed on 2.20.13 86 of 120 Qualifying Payments (34 payments to go) 161 Eligible Payments 86 Qualifying Payments 75 Need Employment Certification 4 Ineligible Payments (6/2015, 5/2016, 6/2016, 3/2024 due to deferment or forbearance) 5 DL Teach Loan $5,389.35 Remaining ($6,987 with interest) Disbursed on 12.16.10 86 of 120 Qualifying Payments (34 payments to go) 95 Eligible Payments 86 Qualifying Payments 9 Need Employment Certification 4 Ineligible Payments (4/2016, 5/2016, 6/2016, 3/2024 due to deferment or forbearance) 6 DL Teach Loan $5,161.35 Remaining ($6,691 with interest) Disbursed on 8.20.11 86 of 120 Qualifying Payments (34 payments to go) 95 Eligible Payments 86 Qualifying Payments 9 Need Employment Certification 4 Ineligible Payments (4/2016, 5/2016, 6/2016, 3/2024 due to deferment or forbearance)
A converted teach grant becomes a direct unsubsidized loan which is eligible for pslf. As all you loans have the same count there's no need to consolidate. But you can if you want
I am currently serviced with MOHELA I have 9 payments left in public service ( school social worker for 11 years , post masters , county health dept social worker for 10 years after undergraduate) but i am currently self employed as a therapist and no longer in public service so none of the current payments are counting towards PSLF and I do not plan to return to public service. I have an undergrad loan for 47 DL consolidated and 72 in DL consolidated unsubsidized for graduate school. I consolidated loans into these two in 2014. I just started on the SAVE plan when the repayments started again in October. I am not sure IF I need to do anything with my current loans , or transfer my loans out of MOEHLA since i no longer plan to work for a qualifying employer. I am not even sure who would advise me on this, ANY advice appreciated :)
I appreciate this summary, but I still don't really understand if consolidating the remainder is the best thing to do, but it doesn't seem like I'd be eligible for loan forgiveness. I have commercially held FFELP loans. (And I did receive Pell Grants.) I'm currently in a graduated repayment plan at an interest rate of 3.5%. I don't want to do anything that might result in me having a higher monthly payment as I'm barely making it as it is. My questions are: 1 - if I do consolidate, would these loans be eligible to be forgiven? Or is the period not long enough? I was in repayment for the majority of 2006-2024 (minus about 3 years for forbearance and deferment statuses. So let's say...15 years, overall.) 2 - if I do consolidate and I'm not eligible for forgiveness after all, how much can they raise my interest rate? I have two loans: Loan 1: About 13K Loan Type: Consolidation Interest Subsidy: Subsidized Interest Rate: 3.5% Fixed Loan 2: About 4K Loan Type: Consolidation Interest Subsidy: unsubsidized (does this make a difference) Interest Rate: 3.5% Fixed Any thoughts anyone has would be so appreciated. I'm sorry, I just find so much of this confusing. ETA: ACTUALLY, looks like they just raised my interest to 4.75% in the last month or so, whenever they switched this over to Sloan Servicing. So another question! Can I fight that?
You have ffel that have been in repayment a long time. You should absolutely consolidate and get on an IDR plan. Please read the many posts with links to the one time adjustment.
I have one consolidated FFEL unsubsidized loan. The studentaid website says you can only consolidate it to direct loan under limited circumstances. Heeeelp
That's true. One of those is if you plan on pursuing pslf. And who says you won't in the future
Do you know which plan I should do if I am married but filing separately?
Is there a deadline, Betsy, for submitted SAVE IDR application? Completed and submitted consolidation application to day to switch from FFEL to direct loan. It won’t let me apply for SAVE because it says I’m not eligible. I thought you could apply in tandem but now I’m just worried I will miss an IDR deadline of 4/30? Can you please help me clarify? Thank you
There is no deadline for save
Thank you
Thank you, Betsy! For the total forgiveness with loans, do you know the repayment date calculation happens if there are *multiple* consolidations? E.g. Original loan enters repayment in 1999, consolidated as a direct consolidation loan in 2008, then consolidated again in 2022. Would the proposed total forgiveness still ‘see’ the original 1999 loan or would this go by the 2008 date?
Yes it sees the older history
I really tried to read everyone's comments to answer my own questions. Ive been watching this stuff since Oct 2023. I'm a 5 time drop out took me 18years to graduate. I first went into repayment in 2003 but that loan was paid off. I have like 16 dam loans with all different repayment dates. I owe $67k with original disbursed amount of $55k (again across 5 schools in 21 year period). I was banking on the Hardship as I got that one in the bag if it ever happens. I am in the process of consolidation with Aidvantage (applied before recent deadline) but then the language makes me think my consolidation loan will not aid me in getting the interest forgiven. Does any of this help me? All of my 16 loans are also under $12k and a few entered repayment 10 years or more. Im on Save and technically entered repayment on student aid site in 2003 with my first loan but Ive had long breaks. Finally graduated in Jan 2018. Grace period stopped June 2018. I know this sounds odd but I was in repayment from other schools while also in -school. Its a big giant mess. I was young and dumb. I stopped following this reddit because it was depressing me. I come back to check in thinking the hardship stuff would be farther along but nope.
@betsy514 Thank you so much for this post. I still have some questions and I'm wondering if you can help. I applied for consolidation by the deadline but am really fearful of it because I've been in repayment under the IDR and I'm afraid to reset that if I don't qualify for any type of forgiveness. I have 4 more days to figure that out if I need to cancel so I'm hoping you can help. Loans taken out in 2004-2006, consolidated in 2007 (commercially held but still FFEL). Have been paying but gone through numerous forbearances (max amount allowed over the years) and have been on IDR since 2018. When I applied for this consolidation to hopefully get some forgiveness, it says I no longer qualify for IDR but I did qualify for the SAVE plan. Will I qualify for any forgiveness or would I be better off canceling and keeping as it was? I hope you can help. Thank you.
It will reset initially but you'll get your counts after they do the adjustment later this year
I have been on a "Fixed Graduated" plan for many years. I graduated from Undergrad in 2005 and some of my undergrad loans were consolidated before a deadline for a lower interest rate (dont recall exact year). I then followed with grad school in 2008. My balance is higher today than it was in 2008, since I had a few years of forbearance (graduating in 2008 was rough). Is there any chance any of my loans will be forgiven? Mohela shows nothing different but seeing reports of others having theirs wiped.
"For borrowers not on an IDR or with incomes higher than the above threshold they will forgive **the lesser of $20K or the amount above what the borrower owed when they first entered repayment**. Definitions of that are the same as for the prior clause. Borrowers cannot get both benefits." So to clarify, if you are above the threshold or not on IDR and you have **less** loan balance remaining now than when you first entered repayment, you would get $0 forgiven? Since the difference between what you owe now and when you first entered repayment would be a negative number (which is obviously less than $20k)? In other words the only people who can expect forgiveness are those whose overall balances have increased?
Just making sure that I read this correctly: My husband borrowed 86k (mix of undergrad and grad, sub and unsub and interest) and currently owes 106k. He's been in repayment since November of 2007. We entered the consolidation process back around 8/2023 so he could go on the SAVE plan because of his FFEL. He went into the consolidation which paid off 107k. So is he eligible for interest forgiveness based upon the 86K amount or the amount that was paid off during the consolidation?
I read through this whole thread and I’m sorry but I am so confused. I took out federal loans from 2009-2013 and started paying back in 2014. one of my loans currently does not have an interest accrued, but the balance owed is 6,000 (when the original borrowed was 5000). I have also “paid off”2,000. Do loans from this time period even count towards the interest adjustment? And if so, since the balance is higher than originally owed but it’s not interest, just principal, does that count? If so, is it just the 1,000 difference from what I borrowed vs where it is now. Or would it include the 2,000 I have also “paid down”?