IDR Account Adjustment

The IDR Account Adjustment is a one-time account revision that will allow borrowers to earn retroactive credit towards IDR Forgiveness (IDRF) and Public Service Loan Forgiveness (PSLF) based on a set of relaxed rules. Borrowers with Department of Education (ED) held loans such as Direct loans or some FFEL loans as of June 30, 2024 will benefit automatically. Borrowers who filed a consolidation application for their non-Direct loans such as FFEL or Perkins by June 30, 2024 will also receive the Account Adjustment. 

ED is in the process of completing the Account Adjustment and loan servicers will be provided with borrowers’ qualifying payment counts. It is possible, however, that borrowers may not be able to see these counts from the servicer site. It is not clear when servicers will communicate the results of the Adjustment.

• Borrowers who currently have commercially held FFEL, Perkins or other non-Direct loans will not be able to benefit from the IDR Account Adjustment. 
• Borrowers with ED held FFEL loans will receive the Account Adjustment which will help them move closer to IDR Forgiveness. You must continue to make payments in the IBR plan to earn additional credit towards IDRF.  However, borrowers with any non-Direct loans, including ED help FFEL,  looking to pursue PSLF will need to consolidate and will have to start the PSLF process from scratch (meaning you will have to accumulate 10 years of qualifying payments from the date the Direct Consolidation loans are disbursed to have your debt forgiven). 
• If you are pursuing IDR Forgiveness and are considering consolidation, be aware that consolidating your loans to pursue IDR Forgiveness now may result in loss of all retroactive credit unless the courts considering the SAVE lawsuit decide that a rule change that would have allowed retroactive credit to be retained after consolidation can go into effect.

If you are uncertain of how the IDR Account Adjustment affects you, reach out for help. And seek advice before consolidating your loans. 

Reopening of PAYE and ICR to all eligible borrowers

As part of the intended rule changes that were to take effect on July 1, 2024, PAYE and ICR (for non-Parent Plus borrowers) were to be phased out. Since the SAVE court injunction went into place in mid-July, these plans have only been available to those who applied for or were already enrolled in these plans by July 1, 2024 (ICR remained available to Parent Plus borrowers who consolidated).

On November 15, 2024, ED introduced an Interim Final Rule (IFR) that revises the end date of these plans from July 1, 2024, to July 1, 2027. They anticipate the rule will be final mid-December. In effect, this rule would reopen PAYE and ICR, giving borrowers more plan options. For more details, see the Federal Register.

IDR and Consolidation Application Processing

• Borrowers can submit online applications for IDR plans and Consolidation. Expect processing delays.
• Currently, ED is only allowing borrowers to apply for SAVE and IBR. That should change when the above-mentioned Interim Final Rule goes into effect mid-December.
• When submitting an IDR application on its own or through a consolidation, you must upload proof of income. 

Record Retention

The student loan system has been plagued by servicer errors and sometimes technical account problems. In anticipation of more changes and confusion, we want to emphasize the importance of keeping good records: 

• From your servicer account(s): Check your inbox and download copies of important notifications. Screenshot or download your loan details and payment history periodically, particularly if you are consolidating your loans or you are notified that you will be transferred to a different servicer. 
• From your StudentAid.gov account: Borrowers should download IDR and Consolidation Applications from the “My Activity” section of their studentaid.gov accounts immediately after filing them. Other information, such as electronically signed PSLF Certification forms, can be screenshotted.

2025-2026 FAFSA Applications are available!

Following a series of successful beta tests, ED has now opened FAFSA to all students looking to apply for the 2025-2026 academic year (July 1, 2025-June 30, 2026). Though this is later than the normal October 1st opening date, it is ahead of the previously announced December 1st roll out. For more detail, read the ED press release.

Industry reports highlight record levels of complaints and disruptions within the federal student loan system

Two major reports on the federal student loan system were released in late November highlighting surging complaints (FSA complaints more than doubled to almost 290,000 during the past fiscal year) as the government and servicers struggled to transition over 40 million borrowers back into repayment and implement a myriad of new rules.

For details, see the Federal Student Aid FY2024 Annual Report and the Annual Report CFPB Student Loan Ombudsman.

Linda McMahon nominated Secretary of Education by Donald Trump

Linda McMahon was nominated to be the next Secretary of Education for the Trump administration. She is married to Vince McMahon, the famous wrestling promoter and CEO of the World Wrestling Federal (WWF). She has spent the majority of her professional life in the wrestling entertainment field. Her position must be congressionally approved. 

For relevant article, see the link below:

AP-What to know about Linda McMahon