3.6 million Borrowers Affected by New IDR Waiver Program
On April 19, 2022, the Department of Education announced they will bring borrowers closer to public service loan forgiveness and income-driven repayment (IDR) forgiveness. Federal Student Aid (FSA) estimates their immediate changes will provide debt cancellation for an estimated 40,000 borrowers.
Several thousand borrowers with older loans will receive forgiveness through IDR. Overall, more than 3.6 million borrowers will receive at least three years of additional credit toward IDR forgiveness.
FSA’s one-time revision of IDR payments address past inaccuracies
- FSA will conduct a one-time account adjustment that will count forbearance of more than 12 months consecutive and more than 36 months cumulative toward forgiveness under IDR and PSLF
- FSA will do a one-time revision of IDR-qualifying payments for all Direct Student Loans and federally-managed Federal Family Education Loans (FFEL) loans. Any months in which borrowers made payments will count toward IDR, regardless of the repayment plan
- FSA will count months spent in deferment prior to 2013 toward IDR forgiveness (with the exception of in-school deferment) for this same population of borrowers to address concerns that, prior to that date, its data cannot distinguish IDR-eligible deferments from other deferments.
Hold times with servicers are expected to increase, again
Unfortunately, FSA made this announcement without giving servicers the opportunity to discuss the IDR waiver ahead of time and are likely unprepared to answer borrower questions. This will create more confusion for borrowers who will be interested to know if they will qualify for forgiveness.
Contact your IonTuition concierge advisor today if you have questions about the IDR waiver program or if you’d like to apply for IDR.