IDR Waiver Account Adjustment: How to Qualify for Forgiveness

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Updated on October 4, 2023

Introduced last year, the IDR Waiver is a game-changer for federal student loan borrowers. It’s part of President Biden’s loan cancellation plan and speeds up loan forgiveness.

Impacting over 800,000 borrowers according to the latest updates, this one-time account adjustment has significant advantages. It’s especially beneficial if you’re targeting income-based repayment forgiveness or the Public Service Loan Forgiveness Program.

This comes at a crucial time, particularly after recent Supreme Court rulings on student debt relief. Read on for a comprehensive breakdown of how the IDR Waiver could affect your loan forgiveness trajectory.

Want to check your payment count under the IDR Waiver? Use our TXT Tool Reader.

This article is focused on the IDR Waiver, a recent adjustment affecting federal student loans. If that’s not what you’re looking for and you’re interested in how income-based repayment forgiveness works, please visit our article on Income-Driven Repayment Plan Forgiveness.

Key Points

  • When it will happen: In 2023, many borrowers will automatically receive a one-time account adjustment under the Income-Driven Repayment Waiver, without needing to apply.

  • Sector-Wide Benefit: Both private and public sector workers, including PSLF borrowers, stand to benefit from the IDR waiver.

  • Potential for Total Forgiveness: It’s estimated that over 4 million borrowers could achieve total loan forgiveness if they consolidate before the December 31, 2023 deadline.

  • Forbearance Counts: Enhancing student debt relief, the waiver now counts periods of 12 consecutive or 36 months of cumulative forbearance towards loan forgiveness.

  • Repayment Time Counts: Regardless of loan consolidation, all-time in repayment, including qualifying forbearance or deferment periods, contributes towards forgiveness.

  • Automatic Account Adjustment: The IDR Waiver is set to auto-adjust borrower accounts in 2023, eliminating the need for individual applications.

  • Eligibility Across Loan Types: Borrowers with various loans, including commercially held FFEL loans, are eligible for these benefits.

Related: Are FFELP Loans Eligible for Forgiveness?

How the IDR Waiver Works

IDR plans like IBR, PAYE, and REPAYE let you make loan payments based on your income and family size. At the end of the term — either 20 or 25 years of repayment — any remaining loan balance gets wiped clean. The IDR Waiver speeds up this process, granting backdated credit and clearing remaining balances for eligible borrowers.

The best part?

The U.S. Department of Education started processing the IDR Waiver in November 2022. And there’s no separate form or application—eligible loans, like Ed-owned Federal Family Education Loans or Direct Loans, get their payment count audited automatically.

Note: Those with commercially held FFEL and Perkins Loans must consolidate those loans into the Direct Loan Program by the end of the year to qualify for the waiver. You can consolidate for free on the Federal Student Aid website,

Thumbnail from IDR Waiver FAQ video.

Watch this video for a deep dive into how the IDR Waiver works.

What is IDR Forgiveness?

IDR loan forgiveness is achieved through income-driven repayment plans and can also work in conjunction with the Public Service Loan Forgiveness Program. Under IDR, you may qualify for loan forgiveness after 10 years of qualifying payments if you’re also working toward PSLF or after 20 to 25 years otherwise.

Expanding on this, IDR loan forgiveness qualifications include consistent payments based on your income and family size. Even payments as low as $0 can count toward your qualifying payments. Additionally, if you’re interested in how your payments are calculated, various online calculators are available to help you. Keep in mind that IDR plans require annual recertification, a factor that’s especially relevant in 2023 as adjustments and waivers are being applied.

Do I Qualify for IDR Forgiveness?

To qualify for IDR forgiveness, you must be enrolled in an income-driven repayment plan and make consistent payments based on your income and family size. Loan forgiveness can occur after 10 years if you’re also working toward Public Service Loan Forgiveness or after 20 to 25 years otherwise.

For those concerned about the ongoing IDR Waiver, certain periods of forbearance can also count toward your qualifying payments. As of 2023, adjustments and waivers are being applied in a phased manner, with new batches of eligible borrowers announced bimonthly.

Related: When Do Student Loans Go Away?

What About the Payment Pause?

Congress recently put a halt to extending the payment pause. On September 1, 2023, student loan interest is back in action, with payments due in October. Don’t worry—we’ll keep you in the loop before that happens.

Remember, the IDR Waiver is a different beast from the Limited PSLF Waiver, which expired on October 31, 2022. That waiver was only open to borrowers who worked for the government, nonprofit, or other qualifying employer. The IDR Waiver is open to all federal student loan borrowers — even those who never enrolled in the IDR Program.

When Will the IDR Waiver be Applied?

As of August 2023, the IDR Waiver has started, with $39 billion in student loan debt forgiven for over 800,000 borrowers. This automatic adjustment will continue to be applied bimonthly over the next year, requiring no application from borrowers. The waiver considers 12 or 36 months of forbearance for loan forgiveness.

Diving deeper, the phased application of the IDR Waiver is part of a broader initiative that began in November 2022. Following President Biden’s announcement, the Education Department has committed to releasing new batches of borrowers eligible for forgiveness every two months. This automatic adjustment doesn’t just offer immediate relief; it’s a continual process aimed at alleviating the student loan burden for many more borrowers in the coming year.

Email of IDR Waiver update sent to client.

This is the email the Education Department is sending borrowers who've met their milestone under the IDR Waiver.

Importantly, there’s been a substantial extension in the IDR Waiver’s original deadline. Initially slated to end on May 1, 2023, the deadline has now been extended to December 2023. This extension provides additional time for eligible borrowers to benefit from this initiative.

Perhaps the most convenient aspect of this program is its simplicity. There is no separate form or application necessary – the process is entirely automatic. If you have eligible loans like FFEL or Direct Loans and have completed either 240 or 300 months of payments for IDR Forgiveness, or 120 months for Public Service Loan Forgiveness, you could be part of the group that will witness a significant reduction or complete elimination of your student loans as early as this summer.

Timeline Updates

But wait—there have been some changes. At first, the Education Department those borrowers would see forgiveness by fall 2022. Everyone else would enjoy the benefits by January 2023. That didn’t quite go to plan.

The timeline got a refresh.

Now, those eligible for immediate loan forgiveness should get the good news before the end of the summer. For everyone else, you’ll need to wait until after August 1, 2023, for retroactive IDR credit.

Deadline Extensions and Other Factors

Originally, the IDR Waiver would wrap up by May 1, 2023. Good news—the deadline got bumped to December 31, 2023. When you’ll hear about your account adjustment depends on when you reach your forgiveness milestone. If you’re there by August 1, 2023, you’ll hear about it before that date. If it’s after, you’ll need to wait a little longer.

Now, things could change. Legal challenges could slow down the process. But for now, the IDR Waiver is live and ready to help you work towards loan forgiveness.

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Understanding the IDR Waiver and Account Adjustment

Let’s delve into ‘account adjustment’ and its role within the Income-Driven Repayment (IDR) Waiver. Typically, ‘account adjustment’ is a term used in accounting to correct or update financial statements. But in the context of the IDR Waiver, it becomes a game-changer for federal student loan borrowers.

To understand why, let’s review IDR plans like Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE). These plans allow borrowers to pay back their federal student loans based on income and family size. If there’s a remaining loan balance at the end of the repayment term (20 or 25 years of payments, depending on the plan), it gets wiped out. The IDR Waiver accelerates this process by backdating credit towards IDR forgiveness and clearing remaining loan balances for eligible borrowers.

So in the context of the IDR Waiver, ‘account adjustment’ means a one-time review and correction of borrowers’ payment histories and loan balances, providing retroactive credit towards IDR forgiveness.

Simply put, the IDR Waiver works as a historical correction or ‘account adjustment’ for federal student loan borrowers.

It retrospectively considers all your repayment time as credit towards IBR Forgiveness, irrespective of the specifics of your earlier payment plans.

This calculation includes periods spent in forbearance and certain types of deferment before 2013 and periods of economic hardship deferment after 2013. But in-school deferments are never credited as a qualifying repayment status under the waiver.

The result?

The IDR Waiver and account adjustment can make a massive difference. By correcting past payment inaccuracies and granting retroactive credit towards IDR forgiveness, they can fast-track borrowers to loan forgiveness. This could mean immediate relief for some and a sped-up journey for others.

Eligibility and Requirements for the IDR Waiver

Curious if you qualify for the Income-Driven Repayment Waiver?

Here’s the scoop: you need at least one Direct federal student loan or Family Federal Education Loan held by the Department of Education.

The good news is that the Biden administration built the IDR Waiver to cast a wide net—it includes folks from both the public and private sectors.

The Must-Haves for Eligibility

Don’t sweat about paperwork—there’s no separate application for the IDR Waiver. If you’re eligible, you’re in. The one-time account adjustment happens automatically for all eligible loans, be they department-held FFEL or Direct Loans.

What About Health Education Assistance Loans?

Got a HEAL loan? Good news: you can also benefit from the IDR Account Adjustment. All you need to do is consolidate your HEAL loans into a Department-held Direct Consolidation Loan before December 31, 2023.

Direct Loan Consolidation for FFELP Loans

Consolidation might sound like a headache, but it could be a game-changer for your student loans. Direct Loan Consolidation lets you roll multiple federal education loans into one—no extra charge. It’s a sweet deal, especially if you have FFELP loans: consolidating them into a Federal Direct Consolidation Loan makes them eligible for the PSLF Program.

Once consolidated, your shiny new loan is eligible for tax-free loan forgiveness—just make 120 qualifying payments on the consolidation loan while working full-time for a public service employer.

More perks of consolidating FFELP loans?

How about three years of pandemic-related forbearance that pauses payments and interest on federal student loans?

Or for parents with loans for their kids, consolidating FFEL Loans into a Direct Loan makes Parent PLUS Loans eligible for the Income-Contingent Repayment (ICR) plan.

This plan links monthly payments for the new Direct Consolidation Loan to discretionary income and family size, potentially reducing payments to zero.

Related: Parent PLUS Loan Double Consolidation

How the IDR Waiver Affects PSLF Applicants

Here’s a fresh spin for PSLF-eligible borrowers: the Income-Driven Repayment Waiver might be your new best friend.

It takes the baton from the Limited PSLF Waiver, extending those flexibilities beyond its expiration date.

Plus, for Parent PLUS Loan borrowers working in public service employment, it’s your time to shine—rack up those IDR credits towards PSLF.

Related: Can Parent PLUS Loans Be Forgiven?

Power Tips to Maximize Account Adjustment

Want to get the most out of the IDR Waiver?

Here’s a pro tip: if you’ve got loans held by third parties or loans with different repayment periods, consider consolidating them into a Direct Consolidation Loan before the clock strikes midnight on December 31, 2023.

Here’s why: if you consolidate loans with different repayment periods, your new Direct Consolidation Loan will be credited with the longest repayment period from your old loans before consolidation. In other words, you get the maximum IDR payment credit based on the individual loans you’re consolidating.

Parent PLUS Borrowers: The Nitty-Gritty

Hey there, Parent PLUS borrowers. You, too, can reap the benefits of the IDR Waiver and add those IDR credits towards PSLF forgiveness, provided you work in public service. To get in on this, you’ll need to consolidate your loans into a Direct Consolidation Loan and sign up for the Income-Contingent Repayment plan—the only income-driven repayment plan open to Parent PLUS borrowers.

Remember that payments under the ICR plan can be higher than other income-driven repayment plans, so take a moment to crunch the numbers before deciding to consolidate. With the IDR Waiver in play, Parent PLUS borrowers can also gain credit towards PSLF under the IDR adjustment.

Note: You can use the PSLF Help Tool to check whether you work for a qualifying employer.

How to Prepare for the IDR Waiver and Account Adjustment

Things you can do right now to prepare for the waiver and account adjustment:

  • Stay in the Loop: Keep your finger on the pulse. Monitor trusted sources like the FSA website and the Consumer Financial Protection Bureau to stay on top of the latest developments.

  • Know Your Loans: Knowledge is power. Understand the ins and outs of your federal student loans—what types of loans you have, their current status, and who your loan servicer is.

  • Consider Consolidating Your Loans: Got loans held by third parties or ones with different repayment periods? Consolidating them into a Direct Consolidation Loan before the ball drops on December 31, 2023, could maximize your IDR Waiver benefits.

  • Enroll in an IDR Plan: Not already on an income-driven repayment plan? Now might be the time to jump on board and ride the IDR Waiver wave.

Is There Anything Else You Need to Do?

Relax— for most borrowers. The IDR Waiver will auto-magically adjust your account. No application is needed.

That said, don’t sit back completely. Stay informed and be ready to take action—like consolidating loans or enrolling in an IDR plan—to milk the most out of your waiver.

How to Check If Your Servicer Knows You Qualify

Your student loan servicer’s job is to keep track of your qualifying payments and forgiveness credits. But given the past mix-ups in payment tracking—which triggered the IDR Waiver in the first place—it’s on the Education Department to make a one-time account adjustment and overhaul their IDR tracking methods.

Wondering if your servicer knows you’re eligible for the IDR Waiver? Just ask them.

Call your loan servicer and ask about your eligibility and account adjustment status.

Remember, processing for the IDR Waiver kicked off in November 2022, so the timeline for adjustments might vary.

Bottom Line

The IDR Waiver represents a substantial stride in enhancing borrower accounts by addressing historical student loan repayment tracking inconsistencies.

This measure doesn’t merely rectify discrepancies; it also provides borrowers with a realistic pathway toward financial liberty.

By retroactively attributing credit towards IDR forgiveness, the waiver can offer instant relief to some and accelerate others toward loan forgiveness.

If you’re considering leveraging this opportunity to wipe out your loans under the waiver, we’re here to help. Schedule a call with us today for a personalized strategy tailored to your unique loan circumstances. We look forward to assisting you on your journey toward financial freedom.

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Can I Benefit from the IDR Waiver If I Have Health Education Assistance Loans?

Yes, borrowers with HEAL can benefit from the IDR Account Adjustment. But you must consolidate your HEAL loans into a Department-held Direct Consolidation Loan before December 31, 2023.

How Can I Maximize My IDR Waiver Account Adjustment?

To get the most out of the IDR Waiver, consider consolidating your loans into a Direct Consolidation Loan, especially if you have loans held by third parties or with different repayment periods. The Direct Consolidation Loan will be credited with the longest repayment period accrued on the individual loans being consolidated.

I Recently Defaulted on My Loan. Will This Affect My Loan Forgiveness?

Good news: the Biden administration has updated its guidance on the IDR Account Adjustment. This allows borrowers to receive credit for periods in default from March 2020 through the month they exit default, as long as they leave default before the end of the “Fresh Start” period. This expanded eligibility could result in over three years of additional IDR and PSLF credit toward student loan forgiveness.

Does Bankruptcy Forbearance Count in the IDR Adjustment?

Unfortunately, no definitive information states that bankruptcy forbearances will be counted in the one-time IDR adjustment. According to the Department of Education, time spent in a bankruptcy status does not count as time in repayment or towards the various forbearance exceptions. For more detailed information about your situation, it’s best to contact your loan servicer or consult a student loan expert.

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