consolidate your federal student loans by april 30

get your student loans forgiven faster

Mar 28, 2024

Good news for student loan borrowers! This summer, the U.S. Department of Education is running a one-time payment-count adjustment for anyone on an income-driven repayment plan. This is basically a recalibration by the federal government to make up for years of bungling the programs put in place to provide relief for student loan borrowers. There are some tricky details to the program — including one move you *have* to make by April 30! — so I’m grateful to Leo Aquino at Queer & Trans Wealth for digging into the details of the program and offering a comprehensive walk-through to help you get set up. Check out the full guide at Queer & Trans Wealth, consolidate your loans by April 30 and get your loans cancelled faster :) -

Dana Miranda

Hello to the 863 hotties who subscribe to this newsletter! Thank you for being here.

With everything going on in the world, it is wildly dystopian to still have to think about paying down student loan debt. My dear hotties, I wish you and all of us eternal relief from student debt. I dream of us getting our mental and emotional capacity back from paying these student loans so we can direct that energy to speaking up and taking action against urgent global injustice.

This summer, the Department of Education is going to complete a one-time payment count adjustment for borrowers on an income-driven repayment (IDR) by July 1, 2024. 930,500 borrowers have already been granted relief from their student loans through the IDR adjustment, and there’s one important deadline to keep in mind if you want to be one of them.

What is the IDR one-time account adjustment?

An income-driven repayment plan calculates a borrower’s monthly payment based on the annual gross income (AGI) on their tax return, which can be found on line 11 on IRS Form 1040. IDR plans also grant borrowers forgiveness after 20 or 25 years of repayment. To break it down into simpler terms:

20 years = 240 months, or 240 payments
25 years = 300 months, or 300 payments

Those payment counts include the 43-month pandemic payment pause for student loans. Partial and late payments and periods of deferment or forbearance typically do not count toward the eligible payments required to get your student loans forgiven.

Let’s say, for example, that you paid the minimum amount of $230 per month for student loans for years, then suddenly got laid off from your job. During the layoff, you might have opted to pay only $30 instead of $230 for six months until you got back on your feet. Unfortunately, those six months don’t count toward the eligible payments needed to forgive your student loans.

The IDR adjustment allows the following payments or months to count toward forgiveness:

Any months in a repayment status, regardless of payments made, loan type, or repayment plan
12 or more moths of consecutive forbearance or 36 or more months of cumulative forbearance
Any months spent in economic hardship or military deferments in 2013 or later
Any time in repayment on earlier loans before consolidation of those loans

Under the IDR adjustment, virtually any type of payment, forbearance, or deferment counts towards the payments needed for forgiveness — which means your loans could get forgiven faster.

What is federal student loan consolidation?

When you borrow money for school, you take out loans per semester. If you go to eight semesters of school, you likely need eight or more different loans. To make matters more complicated, there are two types of federal loans:

Unsubsidized loans are given to undergraduate or graduate students, regardless of financial need. While you’re in school, deferment, or forbearance, you’re not required to make payments, but your student loans will accrue interest during those periods.
Subsidized loans are only given to undergraduate students, and require students to demonstrate financial need. Subsidized student loans do not accrue interest during periods that you’re not required to make payments.

Many borrowers finish school with multiple student loans that have varying interest rates. When you consolidate your student loans, you’re combining all of your debts into one debt with one interest rate.

Special note: Consolidate your federal student loans through www.studentaid.gov/loan-consolidation only. Do not consolidate your federal student loans with a private lender like SoFi or LendKey. If you consolidate your federal student loans with a private lender, you’ll lose key protections like forbearance periods, whether personal or nationwide, like the pandemic payment pause.

Consolidate your federal student loans by April 30

If you consolidate your federal student loans by April 30, your payment count will adjust to include the oldest payments you’ve made on any of your student loans.

Let’s say you graduated from college in June 2007 and you’ve been consistently making payments since you graduated, totaling 15 and a half years, or 186 payments. Let’s say you started making small $20 payments to your student loans in 2005, 2 years before you graduated, just to get ahead. The student loans you started paying earlier will get forgiven sooner than the ones you started paying off after graduation.

In this hypothetical scenario, consolidating your federal student loans would mean those 2 years of early payments would apply to all of your student debt.

Student loan consolidation tips:

Consolidate your student loans at www.studentaid.gov/loan-consolidation.
Experts recommend checking studentaid.gov for your most accurate payment history before starting the consolidation process. This way, when your loans are consolidated, you’ll be able to double-check the payments that count toward forgiveness.
The application form will ask you to select a student loan servicer. You can look up student loan servicers on Better Business Bureau’s website to see their reviews.

Wishing you ease and relief from student loans,

Leo