Consumer Alert: Time is not long left to cancel student loan debt

A lot of debtors with student loan have the chance to get more credit towards cancellation or have their whole loan balance canceled, but they have to take action by April 30, 2024.

Many debtors of student loans are eligible for either partial cancellation of their loans or additional credit towards cancellation. This summer, the U.S. Department of Education will conduct a one-time adjustment; however, you might need to take certain measures in order to be eligible.

The deadline for acting is April 30, 2024. Here’s what you should know.

Some borrower should consolidate their student loan

To earn the most credit for debt cancellation, borrowers holding the categories of federally controlled loans listed below must consolidate them:

  • Commercially held.
  • Federal Family Education Loan (FFEL) and Parent PLUS loans
  • Perkins Loans
  • Health Education Assistance Loan (HEAL) Programme loans

After you complete this step, your new Debt Consolidation Loan becomes eligible for the one-time adjustment, and more of your payments up to this point will be credited towards loan cancellation.


Many people may be eligible to have their student loans cancelled

The one-time adjustment is meant to count more of your payments, allowing them to be added to the payments required for cancellation. If your loan is federally controlled, the Department of Education will credit you for debt cancellation through this adjustment. The adjustment takes into account loan payments received after July 1, 1994, as well as deferments, economic difficulty, and forbearances in certain cases.

This means that with the change, you may be able to meet the cancellation requirements typically applied to loans enrolled in an Income Driven Repayment programme (IDR). Most federal student loans are already eligible for at least one income-driven repayment (IDR) plan. Loans can be cancelled via an IDR after 10, 20 or 25 years of acceptable payments. If you complete the other qualifying requirements, these additional payment periods will count towards Public Service Loan Forgiveness (PSLF). PSLF forgiveness is available after ten years of qualifying payments.

Even if you don’t qualify for cancellation right now, an IDR programme may help you reduce your monthly payment. In an IDR programme, your monthly payment is determined by your income and family size rather than your loan sum. You can inquire about enrolling in an IDR programme at any time.

Considerations for Parent PLUS Borrowers

If you have a Parent PLUS loan managed by the Department of Education and have been in repayment for at least 25 years (or 300 months), this one-time adjustment will immediately cancel your debt.

If you do not have 25 years to repay your Parent PLUS loan, consolidate it before the April 30th deadline to maximise the advantage.

Scammers charge you for something you can do for free

You do not have to pay a fee to consolidate your debt, get it cancelled, or reduce your monthly payments. You can do it for free at the Department of Education’s website.

If you require assistance, contact your service provider or use one of the services mentioned below.

Help Options

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