IDR and PSLF Program Account Adjustment

In April 2022, the Department of Education announced several updates that bring borrowers in income-driven repayment (IDR) plans closer to forgiveness. The changes include a one-time revision of IDR payment counters to correct past inaccuracies. Some eligible borrowers will even receive automatic loan discharges. Borrowers with eligible loans must apply for consolidation by May 1, 2023, to benefit from the one-time account adjustment.

IDR Adjustment 

This one-time revision gives millions of borrowers credit for qualifying payments under IDR and Public Service Loan Forgiveness (PSLF). The Department will adjust accounts for forgiveness, regardless of payment amount, plan, loan type, or missed payments. The changes will:

• Give borrowers credit toward the income-driven repayment clock for all monthly payments — even if they weren’t in an IDR plan.
• Count months spent on deferment (except for in-school deferment) before 2013.
• Count time spent in forbearances that lasted over 12 consecutive months or 36 or more months cumulatively.
• Increase the payment count for public servants using the PSLF Waiver to qualify for forgiveness.

Since the one-time account adjustment will be fully implemented in July 2023, a borrower who missed the Limited PSLF Waiver deadline of October 31, 2022, will have one more chance to have their payment count corrected. More than 3.6 million borrowers will receive at least three years of additional credit toward forgiveness under IDR.

PSLF Improvements through Regulations

The Department announced on October 25th, that lasting improvements to the PSLF program will be codified in final regulations. These improvements, which incorporate many elements of the PSLF waiver, include:

• If you have applied or will apply for PSLF, these changes may have an impact on you by increasing your qualifying payment count.
• If you have 12 or more months of consecutive forbearance or 36 or more months of cumulative forbearance, you will receive PSLF credit for those periods if you certify qualifying employment.
• Allowing borrowers to obtain credit for late, partial, and lump sum payments if the borrower also certifies qualifying employment.
• Awarding credit for certain months in deferment or forbearance, such as those tied to military service or deferments for economic hardship or cancer treatment, if the borrower also certifies qualifying employment.

A complete list of the improvements can be found in the fact sheet. The regulations will be published in the coming days and will go into effect on July 1, 2023.

Borrowers may also be able to count additional periods of deferment and forbearance toward PSLF if they make payments equal to what they would have owed at the time. This includes receiving credit for periods when their required payment would have been $0. The Department of Education has also formalized a reconsideration process that allows borrowers to request a review if errors occur during the application review process.