Expiring benefits: FFEL loan borrowers must consolidate their loans into Direct Loans by April 30, 2024 to get credit for past payments under the Public Service Loan Forgiveness program.
Fee-Only Financial Planner,
Perk Planning
Employees of 501(c)(3) nonprofits and governments with Federal Family Education Loans (FFEL) who hope to have their loans forgiven under the Public Service Loan Forgiveness (PSLF) program and want to get payment credit for the past must take action by April 30, 2024, to become eligible. Here are two reasons why and steps you need to take quickly.
Two reasons to act quickly.
First, the current federal Income-Driven Repayment (IDR) Account Adjustment is an unprecedented opportunity for certain student loan borrowers to get credit for past payments and apply them toward Public Service Loan Forgiveness (PSLF). Borrowers will now get payment credit toward PSLF for the following scenarios (as long as they submit a PSLF form for the same time period):
- “Any months in a repayment status, regardless of the payments made, loan type, or repayment plan;
- 12 or more months of consecutive forbearance or 36 or more months of cumulative forbearance;
- Any months spent in economic hardship or military deferments in 2013 or later;
- Any months spent in any deferment (with the exception of in-school deferment) prior to 2013; and
- Any time in repayment (or deferment or forbearance, if applicable) on earlier loans before consolidation of those loans into a consolidation”
Second, because FFEL loans are not eligible for PSLF, only Direct Loans are, borrowers must consolidate any outstanding FFEL loans, so they’re converted into Direct Loans. The deadline for doing so is approaching rapidly. They should submit a consolidation application via studentaid.gov to consolidate their loans by April 30, 2024 to benefit from the IDR Account Adjustment and get PSLF credit for past payments made on these loans. They should also submit a PSLF form for each employer for any employment period dating back to October 2, 2007.
If an FFEL loan borrower misses this April 30 deadline, they lose the opportunity to get credit for past payments. If they consolidate after the deadline, they will start the PSLF clock all over again at zero payments.
Action Steps: Start Here!
If you’re curious about where and how to start, we’ve provided a guide below. Please read each step carefully.
Step 1: Review the type(s) of outstanding student loans you have.
This will help you confirm whether you have FFEL loans. Here is a quick video tutorial in case it’s helpful!
- Log into your studentaid.gov account
- Click the blue “View Details” button within the “My Aid” box
- Next to the number of loans, click “View Breakdown”
- Within each loan servicer’s box, click “View Loans”
- For each outstanding loan, click “View Loan Details”
- In the upper left corner, you’ll see the loan’s name underneath “Loan Type.” Go through each outstanding loan and take note of each type you see. If you see any that read “FFEL” and/or “FFELP,” the loan(s) must be consolidated for PSLF by April 30, 2024.
Step 2: If you have FFEL loans, submit a consolidation application via studentaid.gov by April 30, 2024.
You can access the consolidation application here. This accomplishes the following:
- Through the consolidation process, your loans will be converted into a new Federal Direct Consolidation loan, which will make it eligible for PSLF.
- You will receive past payment credit toward PSLF due to the IDR Account Adjustment
Step 3: Use the PSLF Help Tool to submit a PSLF form for each PSLF-qualifying employer dating back to October 2, 2007.
While it isn’t necessary to submit them before the April 30th deadline, I recommend that you do so (if possible) because of the upcoming changes to PSLF processing. You should have your employer’s Employer Identification Number (EIN) handy, which you can find in box b of an old W2 or on Guidestar.
Don’t Let This Opportunity Pass You By!
The IDR Account Adjustment can potentially save you thousands of dollars, so it’s well worth taking a few minutes to see if you can benefit. Start by reviewing your outstanding student loans to see whether you have any FFEL loans, and if so, submit a consolidation application on studentaid.gov by the April 30, 2024, deadline!
Emma Crawford is a fee-only financial planner specializing in student loan repayment at Perk Planning, located in Madison, WI. She has consulted on over $100 million in student loan debt, helping her clients secure millions in loan forgiveness. She earned her master’s degree in Counseling Psychology from the University of Minnesota and has the CERTIFIED FINANCIAL PLANNER™ and Certified Student Loan Professional® designations.