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  • Writer's pictureJeff Boron

DOE Extends IDR One-time Adjustment Deadline to June 30th, 2024

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We’ve got an important student loan news update here for you! We use this blog to provide insights, tips, and tools for families planning to pay for college. Today we’ve got an important update for past borrowers. 

On May 15, 2024, the Department of Education announced it would extend the consolidation process for the IDR One-time adjustment program. Today on the blog we’ll cover what that means for borrowers and why it was extended.

Let’s get right into it. Nearly 1 million borrowers have already benefited from forgiveness, and FFEL borrowers should consolidate as soon as possible to receive this benefit. Because of poorly communicated rules and lax oversight, many borrowers lost years of progress toward loan forgiveness that they were entitled to under federal law. 

The one-time account adjustment intends to correct this by providing borrowers with retroactive credit for past loan periods that would not have counted toward loan forgiveness under IDR plans of PSLF. 

What is the IDR One-time Adjustment Program?

The program was created to help student loan borrowers who may have received poor advice or misconstrued information while trying to qualify for loan forgiveness. IDR stands for Income-Driven Repayment. The IDR Account Adjustment focused on correcting many of the errors or issues that borrowers faced while trying to qualify for Public Service Loan Forgiveness and other student loan forgiveness programs. 

The initial deadline for these programs was December 31st, 2023, which was then extended until April 30th, 2024. With this adjustment, borrowers will have more time to adjust until June 30th, 2024.

The process needed to be amended, due to a few reasons.

The Department of Education realized that anyone who missed the extension would be penalized if they did a consolidation after May 1, through June 30, 2024. The consolidations would follow the old consolidation rules and reset the credit months to zero. New consolidation rules will go into effect on July 1, 2024.

People with federal student loans were affected, and some borrowers were in the wrong repayment method. 

Example- Many borrowers had FFEL loans, but forgiveness programs required only Federal Direct Loans. FFEL loans have not been issued after October 2010.

Example 2- Borrowers were told that all repayment methods could be used to qualify for forgiveness, yet only Income-Driven Repayment (IDR) methods qualified.

The IDR One-time Adjustment will Retroactively Credit the following:

  • Any months in a repayment status, regardless of payments made, loan type, or repayment plan. - a student loan consolidation may be required.

  • Twelve or more months 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 months spent in any deferment (except in-school deferment) before 2013

  • Any time in repayment (or deferment or forbearance, if applicable) on earlier loans before consolidation of those loans into a consolidation loan

In addition to helping borrowers that are trying to qualify, or were denied for Public Service Loan Forgiveness, these credit months will also help borrowers try to qualify for end-of-term forgiveness. This is offered after 20 or 25 years of repayment. Because the CARES Act has made all student loan forgiveness tax-free through 12/31/2024, this type of forgiveness could significantly benefit borrowers with older loans. The IDR Account Adjustment will not be permanent, and the Education Department is planning on wrapping up relief later this year. Borrowers with Direct loans and other federal student loans administered by the department can qualify for the IDR automatically. Only Direct loan borrowers can ultimately get forgiveness through PSLF. Other types of federal student loans, such as commercial FFEL loans, Perkins loans, and HEAL loans, would need to consolidate into the Direct loan program to qualify. 

If you have any questions, feel free to reach out to speak with Jeff Boron regarding your potential savings from this extension! 


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