Tick tock, borrowers – the clock is winding down on a unique chance to wipe out student debt. Attorney General Kwame Raoul is putting out the call for those with commercial FFEL (Federal Family Education Loan) Program loans to think fast and consolidate before a fast-approaching April 30 deadline. This move could put them in the running for loan forgiveness by allowing them to benefit from a Department of Education account adjustment aimed at correcting servicing errors that occurred in the past.
The Department of Education has decided to take action to directly remedy past mistakes and automatically adjust the accounts of those with Direct Loans, but it's a different story for the FFEL borrowers. They must take the initiative to consolidate promptly into the Direct Loan Program to not miss out on this opportunity. "I strongly encourage borrowers with commercial FFEL loans to look into consolidation, so they don't miss out on the chance for loan forgiveness," Raoul stated in an announcement that was made available by the Illinois Attorney General's Office.
The account adjustment is a welcome lifeline for those who have been in repayment but saw no progress due to servicing errors. Some payments, forbearances, or deferments that previously did not count toward forgiveness under 20- or 25-year Income-Driven Repayment (IDR) forgiveness or 10-year Public Service Loan Forgiveness (PSLF), will now be credited. The eligible borrowers who are to be automatically granted this adjustment won't have to lift a finger if they have Direct Loans. However, the rest with commercial FFEL loans are left to quickly apply for consolidation through their FSA account if they wish to make the cut-off.
Borrowers should be aware that normally consolidation would reset their forgiveness countdown to zero, but not this time. Raoul urges them to act now: "It takes about 30 minutes to apply for consolidation online by logging into your FSA account." The one-time adjustment will not reset the payment count for those who rush to consolidate before the April 30 deadline, and it has been implied to actually count previously unqualified payments towards loan forgiveness.
Not only those with FFEL loans should be on their toes—borrowers with HEAL (Health Education Assistance Loan) and Perkins Program Loans were also reminded to review their options before the deadline. While they too can consolidate to get in on the adjustment, they will need to weigh out the potential benefits. "Borrowers who want to complete the process by mail can download, print, and complete the application," stated the official announcement.
If there's a shadow of doubt about the type of loan you're dealing with, the government has your back. A quick visit to studentaid.gov, and a few clicks within your FSA account, will clear up the confusion for FFEL holders. Should borrowers require assistance or wish to report any student loan scams, Raoul pointed them to the Attorney General's Student Loan Helpline for guidance. With the deadline looming large, it's high time for eligible borrowers to make their move and possibly erase a slice of their educational debt.
