IDR Waiver & Adjustment: How to Qualify for Forgiveness

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Stanley Tate

#1 Student Loan Lawyer

Updated on October 25, 2022

The IDR Waiver is a one-time relief opportunity that will push millions of federal student loan borrowers closer to loan forgiveness by crediting them for the payments they made and time spent in deferment and forbearance. 

For many years, student loan servicers steered struggling borrowers into forbearance instead of guiding them toward income-driven repayment, which generally caps payments at no more than 10 percent of their income and leads to loan forgiveness after 20 to 25 years of payments.

Those same companies also failed to accurately track borrowers’ progress toward forgiveness, a problem highlighted by consumer advocate groups and in an NPR investigation. And several servicers had no system for tracking payments and identifying when borrowers qualified for loan forgiveness.

In response, the Education Department said it would use a one-time, automatic waiver that will increase borrowers’ payment counts toward income-driven repayment plan forgiveness and the Public Service Loan Forgiveness (PSLF) program.

Keep reading to learn what the IDR Waiver is and what you need to do to qualify for relief.

What is the IDR Waiver?

The IDR Waiver, or IDR Adjustment, is a one-time account adjustment the Education Department is using to give millions of borrowers credit for qualifying payments made towards loan forgiveness through income-driven repayment plans and under the Public Service Loan Forgiveness Program.

In its press release announcing the program, the department said the revision fixes inaccuracies in the administration of federal student loan programs, which include issues with forbearance steering and failing to record IDR payments accurately.

“Student loans were never meant to be a life sentence, but it’s certainly felt that way for borrowers locked out of debt relief they’re eligible for…Today, the Department of Education will begin to remedy years of administrative failures that effectively denied the promise of loan forgiveness to certain borrowers enrolled in IDR plans.” U.S. Department of Education Secretary Miguel Cardona.

The department estimates that the revision will:

  • Eliminate the debts of at least 40 thousand government and nonprofit workers under the PSLF program.

  • Immediately forgive the debts of several thousand borrowers with older loans who have been paying for at least 20 years.

  • Give 3.6 million borrowers pursuing IDR forgiveness at least three years of new credits.

Learn More: Federal Student Loan Forgiveness Programs

How the IDR Waiver works

The waiver will adjust borrowers’ accounts to give them credit toward forgiveness under the IDR program, no matter how much they paid, the repayment plan, loan type, or if they were behind on payments. The changes will:

  • Give borrowers credit toward the income-driven repayment clock for all monthly payments — even if they weren’t in an IDR plan.

  • Count months spend on deferment (except for in-school deferment) before 2013.

  • Count time spent in forbearances that lasted over 12 consecutive months or 36 or more months cumulatively.*

  • Increase the payment count for public servants using the PSLF Waiver to qualify for forgiveness.

This new credit is on top of the forgiveness credit borrowers have been getting since they’ve been in forbearance due to the pandemic payment pause.

Borrowers who were steered into shorter forbearance periods can contact the FSA Ombudsman to request an official account review.

Learn More: What Does Forbearance Mean on a Student Loan?

Eligible loans

  • All Direct Loans, including Parent PLUS Loans.

  • Federal Family Education Loans the Education Department owns.

If you had to keep making federal student loan payments throughout the pandemic, your FFEL Loans are owned by a private company and don’t automatically qualify for the one-time adjustment or the Limited PSLF Waiver. To benefit from the change, you’ll need to consolidate your commercially held FFEL Loans into a Direct Consolidation Loan.

Learn More: FFELP Loan Forgiveness

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How to apply for relief

There isn’t an IDR Waiver form to complete or an application process you need to follow to get credit toward forgiveness. The department has begun working immediately on the changes for the federal loans it owns. Borrowers should see the updated payment count applied to their accounts starting November 2022.

Borrowers with commercially held FFEL Loans must consolidate by May 1, 2023, to participate in the program.

Use the Federal Student Aid website, studentaid.gov, to consolidate your loans.

Learn More: Should I Consolidate My Student Loan Debt?

Other forgiveness programs

In the past two years, the Biden administration has introduced piecemeal fixes that have resulted in nearly $20 billion in student debt cancellation for 725 thousand borrowers. The changes have benefited public servants, active duty military service members, students defrauded by their colleges, and disabled persons.

Many of the changes are temporary. But the department is working to make them permanent.

Bottom Line

Confused about your eligibility for the IDR Waiver and one-time account adjustment? Let’s talk. Schedule a call with me so we quickly determine what steps you need to take to get your loans forgiven.

UP NEXT: Who Qualifies for Student Loan Forgiveness

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