Education Department Announces One-Time Adjustment for Student Debt Relief

Rewriting Article: Eligible borrowers who consolidate their student loans can now qualify for debt forgiveness or receive credit towards existing forgiveness programs, as part of a one-time adjustment announced by the U.S Department of Education this summer. This move comes in response to President Biden’s blocked proposal to provide broad student loan cancellation earlier this year. The American Institute for Economic Research estimates that over 3.6 million borrowers with Direct Loans will receive at least three years worth of credit towards forgiveness, and many may have their loans automatically written off altogether. Previously there were situations in which eligible months would not count against total payment counts; now these discrepancies will be reviewed and updated during the upcoming adjustment period. The Education Department expects this process to conclude by July 1st, 2024, with all Direct Loans (including subsidized loans, unsubsidized loans, PLUS loans and consolidated ones) being included in these changes as well as FFEL Program loans currently managed by the department. Borrowers are encouraged to submit a loan consolidation application before April 30th of next year if they wish to maximize their potential benefits from this adjustment program. It is important to note that while submitting an application does not guarantee eligibility, it takes at least two months for a Direct Consolidated Loan to be processed and disbursed following the submission of such paperwork.