On April 19, 2022, the Department of Education announced changes and updates taking effect in 2024 that will bring borrowers with DOE-held loans closer to Income-Driven Repayment Forgiveness or Public Service Loan Forgiveness. Borrowers with Federal Family Education Loan Program (FFELP) loans who consolidate into the Direct Loan program before the account adjustment is applied will also receive this credit.
The U.S. Department of Education (ED) currently expects that the payment count adjustment will be completed by July 1, 2024. The adjustment will automatically be applied to all Direct Loans and FFEL Program loans that are managed by ED at that time. This includes Direct Consolidation Loans that repaid a privately held Perkins or FFEL Program loan and that are disbursed before the adjustment occurs.
Please note that submitting a consolidation application alone does not guarantee any benefits under the payment count adjustment. In general, it takes at least 60 days to process a Direct Consolidation Loan application and to disburse the new loan. This means that if you want to consolidate your loan(s) to get the benefit of the adjustment, you should submit a loan consolidation application by April 30, 2024.