Student Loan Forgiveness Deadline Is June 30. Here’s What Borrowers Need to know..

By Elena Cordelia

Published on:

Student Loan Forgiveness Deadline Is June 30

If you have student loans, there’s an important deadline coming up that could help you get rid of your debt faster. By June 30, you can apply for loan consolidation, which combines multiple federal student loans into one.

This move could lead to quicker debt forgiveness for many borrowers. Let’s break down what you need to know.

Advertisement

What is Loan Consolidation?

Loan consolidation is when you take multiple federal student loans and combine them into a single new loan. This process can simplify your payments and might help you qualify for forgiveness sooner.

Benefits of Loan Consolidation

Consolidating your loans under a temporary policy introduced by the Biden administration can offer several benefits:

Advertisement
  • Single Payment: You’ll have just one loan to pay each month.
  • Quicker Forgiveness: Your loans will be credited based on the longest repayment period of any of your loans.
  • Additional Credits: Some periods that didn’t previously count, like deferments or forbearances, will now count towards forgiveness.

How Does This Work?

Let’s say you have been repaying loans since 2004 and took more loans for graduate school in 2018. Normally, you’d have to wait until 2038 for forgiveness on the newer loans. But if you consolidate now, you could qualify for forgiveness much sooner because your repayment period will be based on the oldest loan.

The Deadline

To take advantage of this policy, you need to apply for consolidation by June 30. Missing this deadline means you won’t be able to benefit from the new forgiveness credits.

Advertisement

How to Consolidate Your Loans

Consolidating your loans is straightforward:

  1. Eligible Loans: All federal student loans, including Federal Family Education Loans, Parent Plus loans, and Perkins Loans, are eligible.
  2. Application: You can apply for a Direct Consolidation Loan at StudentAid.gov or through your loan servicer.
  3. Time Required: The application process takes less than 15 minutes.

Things to Keep in Mind

  • Monthly Payments: Consolidation won’t increase your monthly payments under an income-driven repayment plan, as payments are based on your income, not your total debt.
  • Interest Rate: Your new loan’s interest rate will be a weighted average of the rates on your existing loans.

Potential for Immediate Forgiveness

Some borrowers may see their debt forgiven almost immediately after consolidation, especially those who have been making payments for over 20 years. This includes those enrolled in income-driven repayment plans that offer forgiveness after a set number of years, usually 10, 20, or 25 years.

Advertisement

Consolidating your student loans by June 30 could be a smart move to speed up debt forgiveness. It’s an easy process that could save you a lot of money and stress in the long run. Make sure to take action before the deadline to take full advantage of this opportunity.

Advertisement

Disclaimer- We are committed to fair and transparent journalism. Our Journalists verify all details before publishing any news. For any issues with our content, please contact us via email. 

Elena Cordelia

Elena is a seasoned tax consultant with a decade of expertise in income tax management. Graduating with top honors in Finance, she embarked on a career journey focused on simplifying tax complexities. Elena's insightful articles on thecsc.org provide practical guidance to taxpayers.

Recommend For You