The federal government’s one-time account adjustment aims to eliminate over $400 billion in loans for its 43 million student loan borrowers.
Last year, the IDR Waiver was announced alongside the president’s extension of the payment pause. But it was overshadowed by Biden’s student debt relief program, which pledged to forgive up to $20,000 in federal loans for Pell Grant recipients during their undergraduate studies.
As the legality of that plan is now in question, the spotlight has shifted to this remarkable debt cancellation opportunity.
Here’s the process:
The four types of income-driven repayment plans link monthly payments to income and family size, promising to clear any remaining balance after 20 to 25 years.
Despite being available for over two decades, many remain unaware of this benefit.
Worse, loan servicers like Navient often steered borrowers into forbearances and deferments rather than income-driven repayment plans during financial struggles, causing them to miss out on forgiveness credit.
The waiver rectifies these injustices by increasing borrowers’ payment counts whenever their loan was in repayment, regardless of actual payments made or the repayment plan used. It also grants credit for time in long forbearances and some deferments before 2013 (excluding in-school deferment).
All Direct Loan Program loans will receive extra credit, including Parent PLUS Loans. But FFEL and Perkins Loans borrowers must submit a consolidation application by year-end to qualify.
You can apply for loan consolidation on StudentAid.gov.