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How the Biden Administration is Updating IDR Payment Counts

40,000 are about to get their remaining student loan balance forgiven, and millions more will move closer to IDR loan forgiveness.

Written By: Michael P. Lux, Esq.

Published:

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How the Biden Administration is Updating IDR Payment Counts

40,000 are about to get their remaining student loan balance forgiven, and millions more will move closer to IDR loan forgiveness.

Written By: Michael P. Lux, Esq.

Published:

Affiliate Disclosure and Integrity Pledge

On April 19, 2022, the Department of Education announced a temporary program to update the IDR payment counts for many federal student loan borrowers.

The exact details, explained below, are a bit complicated. As a result, this monumental change might be missed by some borrowers.

What is so significant about the change?

Millions of federal borrowers just got closer to student loan forgiveness. The Department of Education estimates that 40,000 will receive forgiveness.

Updating IDR Payment Counts Fixes a Major Issue

To understand how the changes apply to your student loans, it is helpful to know why the changes were made.

Income-driven repayment plans like IBR, PAYE, and REPAYE help borrowers afford their monthly student loan payments, even if they have a large balance. Crucially, these plans also provide a path to debt freedom. Borrowers on IDR plans can have their debt forgiven after 20 or 25 years, depending on the plan.

Income-driven repayment has existed in some form since 1994. To this day, the representatives at many student loan call centers don’t fully understand how IDR works and how it can help borrowers. As a result, many borrowers have been given bad advice from their servicer over the past 30 years.

Some borrowers were placed on a deferment or forbearance when an IDR plan would have been a better choice. Others were enrolled in extended or graduated repayment plans instead of an IDR plan. Unfortunate advice like this caused borrowers to delay or completely miss out on student loan forgiveness.

Forbearances, Deferments, Extended, and Graduated Repayment

During this one-time update of borrower IDR count, many previously ineligible repayment plans and payment statuses will now get borrowers closer to the required 20 or 25 years worth of IDR payments.

Deferments — Previous periods of borrower deferments will get credit as IDR repayment time. The one exception is in-school deferments, as outlined below.

Forbearances — If a borrower has 12 consecutive months of forbearance, or a total of 36 months of forbearances, the borrower receives credit for IDR payments during this period.

All Repayment Plans — Borrowers who were “In Repayment” get credit as time towards IDR forgiveness, regardless of the repayment plan they were on.

Activity Before Consolidation — Historically, consolidating your loans meant “restarting the forgiveness clock.” Under the new policy, this time will get added as progress towards IDR forgiveness.

Important Note: The rules for IDR forgiveness have not changed. Instead, borrowers receive a one-time credit for previous periods that were not eligible.

Borrowers still need to enroll in an IDR plan if they want to earn additional progress toward loan forgiveness.

What Doesn’t Count Under the Updated Rules?

Most borrowers are likely to see their tally towards IDR forgiveness jump considerably.

However, a few exceptions will limit the benefit to some borrowers.

In-School Deferments — If you were on an in-school deferment, you will not receive credit for this time. Even if you made payments during school, the time does not count.

Grace Period — All borrowers receive a six-month grace period after finishing school before payments start. This time will not count towards IDR forgiveness.

FFEL Loans — The most significant exception is that borrowers with FFEL loans will not benefit from this program. However, it is possible to work around this issue. (see the next section)

Steps Borrowers Must Take

The good news for borrowers is that these updates happen automatically.

The one exception is commercially-held FFEL loans. If you have an FFEL loan, you should consolidate by January 1, 2023, which is the date the Department of Education expects to update the count.

Many borrowers delayed consolidating for fear of losing progress towards forgiveness. The new policy temporarily allows FFEL borrowers to consolidate without starting from the beginning.

How to Find Your Payment Status History

Payment histories are notoriously difficult to track down. Loans often move from one servicer to another. Information sometimes gets lost in the transition.

Fortunately, studentaid.gov has records of your payment status history. To find these records:

  1. Log in to studentaid.gov.
  2. In the My Aid section of the dashboard, click on View Details.
  3. Next, scroll down to the loan breakdown at the bottom of the page.
  4. Click on the View Loans dropdown.
  5. This will pull up a list of your student loans.
  6. Select View Loan Details for the loan that you want to review.
  7. In the top section, there is a link for Loan Status History.

The loan status history should show periods of repayment, deferments, and forbearances.

About the Author

Student loan expert Michael Lux is a licensed attorney and the founder of The Student Loan Sherpa. He has helped borrowers navigate life with student debt since 2013.

Insight from Michael has been featured in US News & World Report, Forbes, The Wall Street Journal, and numerous other online and print publications.

Michael is available for speaking engagements and to respond to press inquiries.

5 thoughts on “How the Biden Administration is Updating IDR Payment Counts”

  1. Hi Michael…I have 2 undergraduate loans with Nelnet since March of 2003 and I went on their website to see how many repayments, deferments and forbearances I have. Then I went on the studentaid.gov to see as well. They do not match.. I’m concerned because through Nelnet site I would have 49 forbearances which means they would count towards loan forgiveness and I’d like only need 3 more payments to be done…Now through the Studentaid.gov they have me as 35 forbearance which is less than 36 and from what I can tell none of them where for longer than 11 months though one was for 11 months and supposedly I paid for a month and then put on forbearance for another 11 months. That one seems fishy. Would I be able to inform them their records don’t match up with Nelnet’s or am I stuck with what they tell me? Also does the COVID forbearances count towards the 36 cumulatitvely? Thanks for any help! I know perhaps I will just need to wait and see what happens but I’m trying to stay ahead of the game.

    Reply
    • Hi Christopher,

      My first suggestion would be to print copies/take screenshots of all of the information that you see right now. These records may be helpful in the future.

      As for the Covid payment pause, it likely will not count towards the 36 months.

      I think your instinct to wait and see is probably the right approach at this time. If there is an issue, you can address it when it arises. There isn’t much you can do about something that might go wrong.

      Reply
  2. I have 3 “grad” courses on my transcripts. These were for keeping my teaching certificate according to Idaho law. I have a letter stating I was accepted to grad school on a temporary basis only. I was then and am now on disability and could not go to grad school but Navient says I have to wait for 25 years for forgiveness. Is this true?

    Reply
    • Borrowing loans for grad school means that it takes 25 years, instead of 20 years under REPAYE for forgiveness. I’d suggest keeping on eye out on the new repayment plan that Biden recently announced. They haven’t released the full details, but the forgiveness provision might help you out.

      Additionally, because you are on disability, you might want to check out disability discharge. I don’t know your circumstances, but you might benefit from that approach.

      Reply

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