Your Top Student Loan Questions Answered: IDR One Time Adjustment & SAVE Programs

In a previous article, I explained consolidation and discussed if it was the right option for you. In addition to the general benefits of consolidating, consolidation is necessary for certain borrowers to gain access to certain repayment plans and forgiveness programs. One such program is the Income-Driven Repayment (IDR) One Time Adjustment.

Under the IDR adjustment, ED will review borrowers' accounts and give them credit for certain months that didn't previously qualify towards IDR forgiveness. This program immediately benefits borrowers who have been in repayment for at least 20 years. However, borrowers with commercially held (private) Perkins Loans, Federal Family Education Loan (FFEL) loans, or Health Education Assistance Loan (HEAL) Programs do not automatically qualify for the IDR adjustment and must consolidate to be reviewed by ED.

Under normal rules, when a borrower consolidates their loan(s), their repayment count is reset to zero. Under the updated, temporary rules, borrowers can consolidate without resetting their payment count. This means that they will receive credit for repayments, and certain periods of forbearance and deferment, back to their initial start of repayment.

In December 2023, ED announced that the deadline for consolidation has been extended toApril 30, 2024, for borrowers to receive the full benefit of IDR payment count. The IDR Adjustment will also benefit borrowers who are on the Public Service Loan Forgiveness (PSLF) track, as it will increase their payment count by crediting certain months of forbearance and deferment.

The one-time pay count adjustment will occur in Summer 2024. But borrowers who have non-federally held loans must consolidate their loans into a Direct-Consolidation Loan by April 30, 2024. I encourage borrowers who have Parent PLUS, commercially managed Federal Family Education (FFEL), Perkins, or Health Education Assistance Loan (HEAL) loans to consolidate their loans by April 30, 2024, to get the full benefits of the IDR payment count adjustment. If you have questions about your loans or are unsure if consolidation is right for you,