What You Need to Know About Student Loan Account Adjustment

Student loan account adjustments can be a complex and overwhelming process, but understanding the basics can make a big difference. According to the Federal Student Aid website, a student loan account adjustment is a change made to a borrower's loan account that affects the amount of money they owe.

If you're thinking about making a payment, it's essential to know that your loan servicer may be able to accept payments online, by phone, or by mail. This can help you avoid late fees and penalties.

Loan servicers are responsible for managing your loan account, so it's crucial to understand who your servicer is and how to contact them. As of 2022, there are over 7,000 loan servicers in the US, so it's essential to verify your servicer's information to avoid confusion.

The IDR payment count adjustment is now live, and borrowers can view their updated payment counts and progress toward forgiveness using the new IDR payment count tracker on StudentAid.gov.

Most borrowers won't see major changes to their payment counts until early 2025, but the tracker allows you to see exactly where you stand today.

The tracker shows total payments made, how many remain, and includes a projected forgiveness date for each borrower.

If you missed the June 30, 2024, consolidation deadline, you can still see past IDR credit, but you must enroll in an eligible IDR plan to continue progressing toward forgiveness.

There are four main IDR plans: PAYE, ICR, IBR, and SAVE. However, legal challenges have affected the SAVE plan, so you may want to consider one of the other options.

Here are the possible outcomes of the payment count adjustment:

To be eligible for the one-time account adjustment, you must have been enrolled in an income-driven repayment (IDR) plan. However, the Department of Education has made it possible for borrowers to receive credit toward forgiveness even if they weren't in an IDR plan.

Borrowers who have had their loans for over 20 years are also eligible for forgiveness, but they must be enrolled in an IDR plan. The SAVE plan litigation has made it complicated to decide which plan to choose, but it's essential to enroll in an IDR plan to get your loans forgiven.

The one-time account adjustment will give borrowers credit toward forgiveness under the IDR program, regardless of how much they paid, the repayment plan, loan type, or if they were behind on payments. This means that millions of borrowers will receive at least three years of additional credit toward forgiveness under IDR.

If you're on an IDR plan or were on one in the past, you're likely already familiar with the process. You're also eligible if you're in the Public Service Loan Forgiveness (PSLF) program.

Many borrowers are interested in reducing their monthly payments, and IDR plans can be a great option. If you're not on an IDR plan but want to reduce your payments, you can learn more about IDR plans here.

To be eligible for IDR plans, you must have Direct or Federal Family Education Loan (FFEL) Program loans held by the U.S. Department of Education (ED). This includes borrowers who are currently on an IDR plan or were on one in the past.

Borrowers with commercially-held FFEL or Perkins loans can also get the benefit of the adjustment by applying to consolidate by June 30, 2024.

If you're already enrolled in the SAVE Plan, you're probably aware that it's currently blocked by a court order. This means any months you spend in this plan won't count toward loan forgiveness.

To stay on track, consider switching to another IDR plan, like Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), or Pay As You Earn (PAYE). These plans remain unaffected by the litigation and still allow you to earn forgiveness credit as long as you meet the requirements.

Before you switch, make sure you're eligible for the plan you choose. If you're unsure, contact your loan servicer, the Federal Student Aid Information Center, or one of our experts.

If you're interested in applying for an IDR plan, the first step is to check if you're already enrolled in one. If you're not, you can consider switching to another IDR plan like Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), or Pay As You Earn (PAYE), which remain unaffected by the SAVE plan litigation.

To choose the right plan, you can check the IDR tracker on StudentAid.gov to see your progress. If you're close to forgiveness, switching to an IDR plan could save you years of payments.

You can also book a call with one of our student loan experts to help you evaluate your proximity to forgiveness and guide you through choosing the right plan.

If you're unsure about which plan to choose, it's always a good idea to contact your loan servicer, the Federal Student Aid Information Center, or one of our experts for guidance.

To apply for an IDR plan, you'll need to fill out a form and provide some basic information about your income and family size. You can find the form on the Federal Student Aid website.

Here are the steps to apply for an IDR plan:

Keep in mind that it may take several weeks or even months for your application to be processed, so be patient and stay on top of your payments in the meantime.

To be eligible for the one-time IDR adjustment, you need to know which loan types qualify. Direct Loans automatically qualify, which is a big relief for many borrowers.

Here are the loan types that qualify for the adjustment, either automatically or after consolidation:

Parent PLUS Loans are a bit tricky, as they only qualify for specific IDR plans like Income-Contingent Repayment (ICR). If you have a Parent PLUS Loan, make sure you're on the right track with your repayment plan.

If you have commercially held FFEL Loans, HEAL Loans, or Perkins Loans, you'll need to consolidate them into a Direct Loan to qualify for the adjustment.

To qualify for the one-time IDR adjustment, you need to have federally held loans, which means they're held directly by the U.S. Department of Education.

If your loans are commercially held FFEL loans, HEAL loans, or Perkins loans, you'll need to consolidate them into a Direct Consolidation Loan to qualify.

You can check who holds your loans by logging in to StudentAid.gov and reviewing your loan details. If your loans were previously with servicers like Navient, Granite State, or others but haven't transferred to a federal servicer like Mohela, they're likely commercially held Federal Family Education Loans and need consolidation.

To consolidate your loans, you'll need to act quickly - the deadline is June 30, 2024. If you don't consolidate by then, you won't qualify for the adjustment, but you can still benefit from future IDR credits.

Here are the types of loans that need consolidation to qualify for the one-time IDR adjustment:

Remember, consolidating your loans will give you access to the one-time IDR adjustment, which can bring you closer to forgiveness under income-driven repayment plans.