Tuesday is the deadline to consolidate loans for student loan forgiveness. Here's how (2024)

FAQs

Do I need to consolidate my student loans for forgiveness in 2024? ›

Normally, consolidating your loans would cause you to lose credit for qualifying payments you've already made toward IDR forgiveness or toward PSLF. But if you apply to consolidate by June 30, 2024, any IDR payments you made before you consolidated will still count toward IDR forgiveness.

Because of this updated timeline, borrowers with non-federally held FFEL loans who apply to consolidate by June 30 can still benefit from the payment count adjustment. The prior consolidation deadline was April 30.

Many student loan borrowers have an opportunity to receive full student loan cancellation or more credit towards cancellation. The U.S. Department of Education will conduct a one-time adjustment this summer , but you may need to take steps to qualify. The deadline to act is June 30, 2024. Here's what you need to know.

The Biden administration on Wednesday announced that it is extending a critical deadline for borrowers who are pursuing student loan forgiveness under a one-time adjustment initiative. Borrowers who needed to consolidate their loans to qualify for relief would have had to apply by April 30.

Consolidation can get you closer to loan forgiveness

Those payments are typically lower than they would be under a standard repayment plan — and, in some cases, they can be zero. Depending on the plan, borrowers can get any remaining debt forgiven after 10, 20 or 25 years.

You can identify your loan types by logging on to StudentAid.gov and selecting “My Aid” in the dropdown menu under your name. In the “Loan Breakdown” section, you'll see a list of each loan you received. You'll also see loans you paid off or consolidated into a new loan.

While consolidating can be a useful tool, there are still some drawbacks to be aware of before making the decision: Pay more interest over time: Choosing to pay off your loan over 30 years will lower your monthly payment but cost you more in interest over time.

If you have loans that have been in repayment for more than 20 or 25 years, those loans may immediately qualify for forgiveness. Borrowers who have reached 20 or 25 years (240 or 300 months) worth of eligible payments for IDR forgiveness will see their loans forgiven as they reach these milestones.

While you can't consolidate private loans into a federal loan, if you have both private and federal loans, you can consolidate the private ones with a private lender and the federal ones through the government program.

Student Loan Forgiveness Consolidation Deadline Bumped To April 2024. The Education Department last year approved at least 855,000 borrowers for student loan forgiveness under the Income-Driven Repayment Account Adjustment.

Why does my student loan say paid in full by consolidation? ›

What does paid in full by consolidation mean? Paid in full by consolidation in student loan terms means that multiple loans have been combined into one larger loan — typically with improved repayment terms, such as more flexible repayment options, lower monthly payments, or greater loan forgiveness opportunities.

If you work full time for a government or nonprofit organization, you may qualify for forgiveness of the entire remaining balance of your Direct Loans after you've made 120 qualifying payments—i.e., 10 years of payments. To benefit from PSLF, you need to repay your federal student loans under an IDR plan.

What if you missed the loan consolidation deadline? If you didn't consolidate your loans and currently hold Direct Loans, they should still be eligible for debt relief under any federal programs you qualify for. You just might have to wait longer for forgiveness.

Borrowers with only undergraduate debt would qualify for forgiveness if they first entered repayment 20 years ago (on or before July 1, 2005), and borrowers with any graduate school debt would qualify if they first entered repayment 25 or more years ago (on or before July 1, 2000).

“Congress recently passed a law preventing further extensions of the payment pause. Student loan interest will resume starting on Sept. 1, 2023, and payments will be due starting in October. We will notify borrowers well before payments restart.”

Consolidation can lower your monthly payment by giving you a longer period of time (up to 30 years) to repay your loans. If you consolidate loans other than Direct Loans, consolidation could give you access to additional income-driven repayment (IDR) plan options and Public Service Loan Forgiveness (PSLF).

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.

Waiting to consolidate until after that six-month to nine-month grace period allows you to delay repayment. However, if you consolidate sooner you may be able to lock into a lower, fixed interest rate on your consolidation loan before the variable interest rates on your individual loan(s) start to rise.

What does paid in full by consolidation mean? Paid in full by consolidation in student loan terms means that multiple loans have been combined into one larger loan — typically with improved repayment terms, such as more flexible repayment options, lower monthly payments, or greater loan forgiveness opportunities.