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Income-Driven Repayment (IDR) Payment Count Adjustment and Effects on Public Service Loan Forgiveness (PSLF) Applicants

The U.S. Department of Education (ED) began conducting a one-time adjustment of payment counts for eligible borrowers in income-driven repayment (IDR) plans in July 2023. Through June 2024, ED will continue to identify and notify borrowers who reach the necessary forgiveness threshold of 240 or 300 months’ worth of qualifying payments. Nelnet will notify you directly after your forgiveness is processed. Make sure your contact information is up to date on Nelnet.com and StudentAid.gov.

All borrowers who are not yet eligible for forgiveness will have their payment counts updated. No further action is required from these borrowers to get this forgiveness. Borrowers who have commercially managed FFEL, Perkins, or Health Education Assistance Loan (HEAL) Program loans, should apply for a Direct Consolidation Loan by April 30, 2024, to get the full benefits of the IDR payment count adjustment.

ED currently expects that the payment count adjustment will be completed by July 1, 2024. When ED implements the adjustment, it will automatically be applied to all Direct and FFEL Program loans managed by ED at that time. This includes Direct Consolidation Loans that repaid a privately held Perkins or FFEL Program loan and that are disbursed before the adjustment occurs.

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

This payment count adjustment may also benefit borrowers in PSLF by increasing PSLF payment counts.

For more specific information on the IDR payment count adjustment and its impacts on PSLF, visit StudentAid.gov/idradjustment.

The one-time payment count adjustment will count time toward IDR forgiveness for eligible borrowers including:

  • any months in which you were in a repayment status, regardless of the payments made, the loan type, or the repayment plan;
  • 12 or more months of consecutive forbearance or 36 or more months of cumulative forbearance;
  • months spent in economic hardship or military deferments in 2013 or later;
  • months spent in any deferment (with the exception of in-school deferment) prior to 2013; and
  • any time in repayment (or deferment or forbearance, if applicable) on earlier loans prior to consolidation of those loans into a consolidation loan.

Please note: If you have applied or will apply for Public Service Loan Forgiveness (PSLF), these changes may benefit you by increasing your qualifying payment count under the PSLF Program.

Read on to find out whether you could benefit from this one-time payment count adjustment.

Who is eligible and how do I take advantage?

IDR Adjustments

This one-time IDR payment count revision applies automatically to borrowers with Direct Loan Program * and federally held Federal Family Education Loan (FFEL) Program loans (that is, your Nelnet account starts with E).

If you have commercially held FFEL loans (that is, your Nelnet account starts with D or J), you can also benefit from the payment count adjustment, but only if you apply to consolidate into the Direct Loan Program by April 30, 2024. See StudentAid.gov/idradjustment for more information.

ED currently expects that the payment count adjustment will be completed by July 1, 2024. When ED implements the adjustment, it will automatically be applied to all Direct and FFEL Program loans managed by ED at that time. This includes Direct Consolidation Loans that repaid a privately held Perkins or FFEL Program loan and that are disbursed before the adjustment occurs.

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

Please note that this adjustment that counts all prior periods of repayment toward IDR forgiveness applies even to those borrowers who have never been on an IDR plan. If you’re not on an IDR plan and your payment counts increase under this adjustment but your loans do not immediately qualify for forgiveness (because you still need more months/years of payments to become eligible), you will need to enroll in an eligible repayment plan in order to continue accruing credit toward forgiveness.

*This also applies to parent PLUS borrowers, even though typically Direct PLUS loans for parents are not eligible for an IDR plan unless they are consolidated (which then specifically qualifies them for an Income-Contingent Repayment [ICR] Plan). ED will forgive all parent PLUS loans (consolidated or not) that have accumulated 25 years’ worth (300 months) or more of time in repayment. ED will also provide PSLF credit to parent PLUS borrowers for the months considered eligible under the adjustment during which the borrower was employed by a qualifying employer. If you don’t have 25 years’ worth of time in repayment for IDR or 10 years of eligible PSLF payments, you need to:

  1. Apply to consolidate your parent PLUS loan by April 30, 2024, to benefit from the adjustment and
  2. Keep making payments under an ICR Plan after consolidating to continue making progress toward forgiveness.

PSLF Adjustments

This one-time payment count revision applies automatically to all PSLF-eligible Direct Loan Program loans, including consolidated and unconsolidated parent PLUS loans. If you believe you might benefit, you should use the PSLF Help Tool to update your employment certification history to reflect all periods of public service employment.

If you have FFEL loans, you can also benefit from the payment count adjustment, but only if you apply to consolidate into the Direct Loan Program by April 30, 2024. See StudentAid.gov/idradjustment for more information.

ED currently expects that the payment count adjustment will be completed by July 1, 2024. When ED implements the adjustment, it will automatically be applied to all Direct and FFEL Program loans managed by ED at that time. This includes Direct Consolidation Loans that repaid a privately held Perkins or FFEL Program loan and that are disbursed before the adjustment occurs.

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

Payment Credits on Consolidation Loans

As part of the payment count adjustment, ED will allow qualifying payments from all loans included in a Direct Consolidation Loan, including FFEL Program and Perkins loans, to contribute toward the qualifying payment count on the Direct Consolidation Loan. The payment count adjustment will not use a weighted average. Borrowers who have commercially managed FFEL Program or Perkins loans, should apply for a Direct Consolidation Loan by April 30, 2024, to get the full benefits of the payment count adjustment.

If you consolidate your loans, the qualifying payments made on the Direct Loans (other loan types will not be considered) included in your consolidation loan will be credited to your consolidation loan using a weighted average of those payments. Borrowers are strongly encouraged to certify all their qualifying employment applicable to the loans before they are consolidated to ensure that weighted average is correctly applied.

For example, a borrower with 60 qualifying payments on a Direct Loan with a balance of $30,000 who consolidates their loan with another Direct Loan with a balance of $30,000 with zero qualifying payments will have a new qualifying payment count of 30 payments credited to the new consolidation loan.

ED currently expects that the payment count adjustment will be completed by July 1, 2024. When ED implements the adjustment, it will automatically be applied to all Direct and FFEL Program loans managed by ED at that time. This includes Direct Consolidation Loans that repaid a privately held Perkins or FFEL Program loan and that are disbursed before the adjustment occurs.

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

What are the benefits?

If you’re a borrower with loans that have accumulated time in repayment of at least 20 or 25 years (that is, 240 or 300 months’ worth of payments, depending on the repayment plan and type of loan) — even if you are not currently on an IDR plan — you’ll see automatic forgiveness starting in summer 2023. If you have made qualifying payments that exceed forgiveness thresholds (20 or 25 years), you will receive a refund for your overpayment.

Any PSLF borrower who has accumulated time in repayment of at least 10 years, that is, 120 months’ worth of payments and certified employment, will see automatic forgiveness.

If you haven’t been in repayment long enough to be eligible for forgiveness at the time the payment count is updated, you’ll receive more months of repayment credit, putting you closer to forgiveness under IDR or PSLF, as applicable.

Please note: PSLF payment counts will not reflect this credit until the one-time payment count adjustment occurs.

How do I find out more details?

Resources on this one-time payment count adjustment, including an overview, updates on implementation of the program, and frequently asked questions, are available at StudentAid.gov/idradjustment.

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