The deadline to consolidate student loans for those who had loans from the Federal Family Education Loan Program or who had Perkins loans has been extended.
Around 3.5 million student loan borrowers who received loans under the FFEL program will have until June 30 to consolidate their loans if they want to qualify for a one-time initiative that could wipe out their entire debt, the Department of Education said Wednesday.
The original deadline was April 30.
Borrowers with those loans are ineligible for most federal student debt forgiveness programs. However, they can consolidate the loans into a new, federally owned direct student loan to become eligible for loan forgiveness.
Borrowers can see what kind of loan they have and consolidate into a new one at StudentAid.gov.
The Biden administration has been pushing the loan consolidation option because when loans are combined into the Direct Loan program, they become eligible for the payment-count adjustment that could result in debt relief.
“The department is working swiftly to ensure borrowers get credit for every month they’ve rightfully earned toward forgiveness,” said Undersecretary of Education James Kvaal. “FFEL borrowers should consolidate as soon as possible in order to receive this benefit that has already provided forgiveness to nearly 1 million borrowers.”
The loans must have originated through the now-defunct FFEL program.
The adjustment program will retroactively credit borrowers with payments made during a time when the plan was mismanaged and payments were not credited properly. The adjustment plan caps monthly payments at a percentage of a borrower’s earnings and forgives the remaining balance after 20 or 25 years, depending on the type of loan.
The department also said on Wednesday that the adjustments were to be finished by July, but it will not take until September to finish them all.
There is no cost to consolidate student loans into one loan. For additional assistance, the Federal Student Aid Information Center can be reached at 1-800-433-3243.
The administration has tried several plans to erase debt since the Supreme Court in June rejected Biden’s student loan forgiveness program, which would have canceled as much as $20,000 in student loan debt for individual borrowers, totaling $430 billion.
Since then, several plans have been introduced to help ease or erase the burden of $1.6 trillion in outstanding federally backed student debt.
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