Transcript
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Arwen Thoman: Thank you for joining us. I'm Arwen Thoman, and I'm the Student Loan Ombudsman here in the Massachusetts Attorney General's office.
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Erica Harmon: and I am Erica Harmon, the Deputy Student Loan Ombudsman.
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Arwen Thoman: Our office invited many of you to this webinar because one or more of your federal student loans is owned by a private lender. As a result, you're at risk of losing out on a historic student loan debt relief opportunity.
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Arwen Thoman: This opportunity is called the Payment Count Adjustment, and through it you can receive forgiveness of your remaining loan balance after your loans have been in repayment for 20 or 25 years, or for borrowers with low original loan balances, in as few as 10 years.
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Arwen Thoman: But to receive the adjustment and get credit toward loan forgiveness for all your past years of payments,
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Arwen Thoman: you have to consolidate your privately owned federal loans into the Direct Loan program by April 30 of this year. In today's presentation, we're going to walk you through the steps that you need to take by April 30. We’ll also explain what you need to do in order to keep earning credit for loan forgiveness.
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Arwen Thoman: So to explain how this historic debt relief initiative works, we need to explain Income Driven Repayment plans. The way the US Department of Education is going to get borrowers closer to loan forgiveness is to adjust how many qualifying payments borrowers have toward Income Driven Repayment forgiveness.
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Arwen Thoman: The first income driven plan was created in the 1990s but more have been put into place over the years.
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Arwen Thoman: These income driven plans base your payments on your income and your family size, and they offer forgiveness after 20 or 25 years of payments, or 10 to 19 years if you had a particularly low original balance.
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Arwen Thoman: The trouble is that in the 30 years since Income Driven Repayment was created, only a handful of borrowers have ever received the promise loan forgiveness. This abysmal track record was due to poor program design and failed implementation by the student loan industry.
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Arwen Thoman: To fix this and to restore borrowers’ credit toward Income Driven Repayment forgiveness, the Biden-Harris administration is taking 2 important steps.
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Arwen Thoman: First, it's conducting this payment count adjustment that will give borrowers credit toward Income Driven Repayment forgiveness for past repayment periods, even if they've never previously been enrolled in income driven plan.
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Arwen Thoman: Second, it's created a new, more affordable and much improved income driven plan called SAVE. As we'll get into later in the presentation, the SAVE Plan is a real game changer.
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Arwen Thoman: But the trick to all of this is that to receive the adjustment and be able to enroll in SAVE, you need to consolidate some or all of your federal loans into the Direct Loan program by April 30 of this year.
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Arwen Thoman: Through this payment count adjustment, you can receive credit toward Income Driven Repayment forgiveness for past repayment periods going all the way back to July 1 of 1994 that would not otherwise qualify toward IDR forgiveness.
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Arwen Thoman: This includes payments you made on ineligible federal loan types, payments you made before consolidating your loans, payments you made before you ever enrolled in an income driven plan,
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Arwen Thoman: any month in which you spent one day in repayment status will count, forbearances that were 12 consecutive months or 36 cumulative months long will count,
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Arwen Thoman: and all deferments prior to 2013 will count, other than in school deferments, and certain deferments after 2013 will count, including economic hardship deferment.
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Arwen Thoman: Unfortunately, periods of default, and again, all periods of in school deferment will not count.
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Arwen Thoman: To benefit from the payment count adjustment, you have to consolidate any privately owned federal loans into the Direct Loan program by April 30 of this year. Once you consolidate, the adjustment will be automatic, but it likely won't occur until July of 2024.
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Arwen Thoman: It's important to understand that even if you don't reach the number of months that are needed for loan forgiveness through the adjustment, you can continue earning more months toward forgiveness by enrolling in an Income Driven Repayment plan, adding to the months that you receive from the adjustment.
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Arwen Thoman: You’ll be able to see how many months you receive for the adjustment in your studentaid.gov account later this year.
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Erica Harmon: So let's get into the steps that you're going to need to take to benefit from the payment count adjustment.
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Erica Harmon: First, you're going to need to log in to your studentaid.gov account to review your federal loan types to see which loans you need to switch into the Direct Loan program through a process called consolidation.
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Erica Harmon: You may have already received a letter or email from us, letting you know that some of your loans have to be consolidated, but it's important to verify that you don't have others that also need to be consolidated.
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Erica Harmon: Second, you'll need to apply to consolidate all of your non-Direct Loans into the Direct Loan program by April 30 of this year.
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Erica Harmon: Third, if you also have some Direct Loans you should evaluate whether including your Direct Loans in your consolidation would help you get forgiveness faster.
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Erica Harmon: and this is going to be a consideration for those of you with loans that have been in repayment for different lengths of time.
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Erica Harmon: and finally, to keep earning credit towards IDR forgiveness, you'll need to apply for an Income Driven Repayment plan like, SAVE by July 1 of this year.
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Erica Harmon: So remember, the adjustment is only available until April 30 of this year.
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Erica Harmon: You must apply to consolidate your non-Direct Loans, including any Navient, Nelnet or AES federal loans you have
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Erica Harmon: by April 30.
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Erica Harmon: So the first step is to review your loan types to see which ones you need to consolidate. Federal loan borrowers can have several different types of loans, including Direct Loans, Perkins loans, and Federal Family Education Loans, known as FFELs.
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Erica Harmon: As you can see in this chart, only Direct Loans are eligible for the adjustment and the new SAVE plan.
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Erica Harmon: You must consolidate any federal loans that are not Direct Loans, such as FFELs or Perkins loans into the Direct Loan program by April 30 of this yearz.
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Arwen Thoman: To review your loan types, you're going to need to go online and navigate to your studentaid.gov account. Studentaid.gov is the US Department of Education's main website for federal student aid and it's really your portal to access information about all your federal student loans and take certain actions with respect to managing repayment.
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Arwen Thoman: To get into this account, you're going to need to log in with something called an FSA ID and password. If you don't have an FSA ID, you should go ahead and create one, and it may take a couple of days for your account to be activated while the Social Security Administration confirms your personal information.
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Arwen Thoman: If you find that you're having trouble getting back into this account, and sometimes that happens if people have changed their email or their phone numbers,
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Arwen Thoman: you can call the US Department of Education for assistance at 1(800)433-3243.
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Arwen Thoman: After logging into studentaid.gov, you'll see your account dashboard, which is what we're looking at right here, and as you can see, it shows your total federal loan balance along with any grants that you've received.
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Arwen Thoman: To find out what loan types you have, you're going to need to click on this view details button.
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Arwen Thoman: In this view, we've clicked the view details button, and we've scrolled down the page to something called the “Loan Types” section, which is where you'll see your loans grouped into several different categories.
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Arwen Thoman: From this view, you'll be able to see easily whether you have an outstanding Perkins loan because it's its own loan category. But to see your FFEL program loans, you'll need to expand each of the other loan type categories to see a breakdown of all the individual loans in each category.
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Arwen Thoman: In this picture we've clicked on the subsidized loan category, and as you can see, there are a bunch of loans within the category. We're looking to identify whether there's an outstanding balance on a loan that is not a Direct Loan.
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Arwen Thoman: In this example, there are 2 loans with outstanding balances. One is a Direct Loan,
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Arwen Thoman: but the other is a FFEL program loan. This FFEL program loan will need to be consolidated.
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Arwen Thoman: Keep in mind, you need to carefully review each of these loan categories to see if any of them contain loan types other than Direct Loans.
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Arwen Thoman: Alright, so while we really want you all to go into your studentaid.gov accounts
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Arwen Thoman: and look at your loan types. We are going to highlight some warning signs that may indicate that you have FFEL program or Perkins loans that need to be consolidated by April 30.
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Arwen Thoman: First, many of you likely received a letter from our office explicitly warning you that you have privately owned federal student loans that you have had as of July, and these loans that that we wrote to people about are FFEL program loans.
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Arwen Thoman: Second, if your federal student loans are still being serviced by Navient or AES, this is a very big red flag that you have FFEL program loans.
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Arwen Thoman: Now, while you can have FFEL program loans if you have another servicer, at this point nearly all the federal student loans serviced by Navient and AES are FFELs.
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Arwen Thoman: Similarly, you could have Perkins loans if your federal student loans are serviced by ECSI Heartland or your school, though again, there are other services that service Perkins.
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Arwen Thoman: And just generally speaking, you can really only have FFEL program loans if you took out federal loans before 2011, and that's because the FFEL program ended in in mid-2010.
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Arwen Thoman: So you know while it is possible that you have Direct Loans if you took out federal loans before 2011,
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Arwen Thoman: it’s also possible that you have these FFEL program loans. Another indication that you have FFELs or Perkins loans that need to be consolidated is if your federal loan payments haven't been paused since March of 2020, when the pandemic began.
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Arwen Thoman: The second step is to consolidate your non-Direct Loans into the Direct Loan program. You can fill out and submit a consolidation application in about 20 to 30 min on studentaid.gov.
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Arwen Thoman: Under “loan repayment”, you're going to need to select “consolidate loans” from the Dropdown menu.
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Arwen Thoman: After filling in some personal information, you'll be shown a list of all your federal loans, and you'll be asked which loans you'd like to consolidate. Again, you're going to need to consolidate all your non-Direct Loans. Now, some people may also want to include Direct Loans in their consolidation, and we'll discuss that scenario in a few minutes. But for the purposes of this example, we're really just working on non-Direct Loans.
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Arwen Thoman: So make sure to select all your FFEL program loans for consolidation by checking the box next to each FFEL Program loan.
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Arwen Thoman: And if you want your Perkins loan to receive credit under the payment count adjustment, you'll need to consolidate it to. We will note, though, that once you consolidate a Perkins loan it will no longer be eligible for Perkins loan cancellation, which is a totally separate program from Income Driven Repayment forgiveness and it's available to borrowers in certain professions, including teachers, nurses, and public defenders.
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Arwen Thoman: To learn more about Perkins on cancellation on studentaid.gov if you're interested.
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Arwen Thoman: On the next screen, you'll be asked whether you want to delay processing your consolidation application. Click “Do not delay processing”.
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Arwen Thoman: You'll next be asked to choose a servicer, and you'll also be asked whether you're consolidating for the public service loan forgiveness program also known as PSLF.
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Arwen Thoman: Now, if you're not pursuing PSLF you can choose “No” and you'll be able to pick your servicer from a list.
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Arwen Thoman: If you are pursuing PSLF, you'll be placed with Mohela, the current PSLF servicer.
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Arwen Thoman: For more information about the PSLF program, we would highly suggest that you sign up for our other webinar on PSLF, where we explain that program in detail.
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Arwen Thoman: Alright as part of your consolidation application, you're also going to need to choose a repayment plan for your new consolidation loan. Now, if you don't reach the required number of months for IDR forgiveness through the payment count adjustment, you're going to need to continue earning credit toward Income Driven Repayment forgiveness starting in July of 2024,
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Arwen Thoman: and for most borrowers this is going to require making payments under an Income Driven Repayment plan.
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Arwen Thoman: So select the box that says “repay based on my income”.
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Arwen Thoman: Now, to calculate these income driven payments, the US Department of Education is going to need access to your income information.
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Arwen Thoman: And there's a nice new feature where you can authorize the Department to just annually access your federal tax returns automatically so that it can just recalculate your payments each year. We definitely recommend providing this authorization so that you aren't burdened with providing your income information every year by the deadline set by your servicer. Historically, there have been a lot of problems with that. So we would suggest that you review the authorization and click “approve” at the bottom of the page.
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Arwen Thoman: Now, after answering a series of questions about your marital status, your family size, and your income you will be showing your payments under the 4 Income Driven Repayment plans, as you can see here.
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Arwen Thoman: Now, often SAVE will offer the most affordable payments -SAVE is the newest Income Driven Repayment plan. But if you have a particularly small loan balance, it's possible that Income Contingent Repayment may offer a lower payment than SAVE
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Arwen Thoman: and if you're consolidating Parent PLUS loans, Income Contingent Repayment will be the only income driven option presented to you here. Before moving on, we do just want to note
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Arwen Thoman: that this page is only useful for seeing what your monthly payment amount will be. These other estimates that they put up about how much you're going to have to pay, and whether you'll be eligible for any kind of forgiveness, these are wrong because they don't take into account the payment count adjustment. So you should disregard them and really just be looking at the screen for your monthly payment amounts.
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Erica Harmon: We have been stressing the need to consolidate non-Direct Loans, because these loans can't benefit from the payment count adjustment unless they're consolidated into the Direct Loan program.
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Erica Harmon: But if some of your loans have been in repayment longer than others, it may make sense to consolidate all of your loans together, including any Direct Loans you may have.
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Erica Harmon: This is because forgiveness will come faster on your more recent loans if you consolidate them with your older loans. So, for example, if you had a gap in enrollment between your undergrad and graduate school studies, consolidating all your loans together would speed up forgiveness on your more recent loans.
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Erica Harmon: So this third step is to evaluate whether this scenario applies to you, and whether you should consolidate all your loans together.
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Erica Harmon: To demonstrate how this works. If your undergraduate loans were going to receive a hundred months towards IDR forgiveness through the adjustment, but your graduate school loans were only going to receive 50 months,
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Erica Harmon: by consolidating them together, the resulting consolidation loan would receive a hundred months which would speed up forgiveness on your graduate school loans.
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Erica Harmon: So we want to take a minute to talk about the interest rate on your new direct consolidation loan, because we hear from a lot of people who are worried about their interest rates increasing if they consolidate.
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Erica Harmon: So how this works is the interest rate on your direct consolidation loan will be a fixed rate equal to the weighted average of the interest rates on the loans being consolidated.
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Erica Harmon: and if that weighted average is between eighths of a percentage point, it will round up to the nearest eighth. So the effect of any rate increase, if there is one, is quite minimal and not something to be concerned about.
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Erica Harmon: and as a reminder, a weighted average takes into account both the loan balances and the interest rates of the loans being consolidated, and on its own, it would never increase your overall interest rate.
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Erica Harmon: So, to give an example, if you had a FFEL consolidation loan with a 4.3% interest rate,
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Erica Harmon: the interest rate on your new direct consolidation loan would round up to 4.375%.
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Erica Harmon: And that's only a .075% increase.
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Erica Harmon: Also, enrolling in auto debit on your new direct consolidation loan will give you a .25% interest rate reduction.
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Erica Harmon: So, if your interest rate does end up rounding up by consolidating,
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Erica Harmon: enrolling in autopay would more than offset that increase.
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Erica Harmon: You can also see what your interest rate will be ahead of time by logging into studentaid.gov in completing step one of the consolidation application.
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Erica Harmon: We do want to note that there is one exception to this rule. While it's somewhat rare, some FFELs are subject to special interest rate borrower benefit programs.
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Erica Harmon: So for example, a 1.5% interest rate reduction for making 48 months of on-time payments. Consolidating does end these special interest rate reductions.
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Erica Harmon: There are a few other special circumstances relating to consolidating that could arise for some people that we're going to run through quickly.
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Erica Harmon: The first is if in addition to your FFEL program loan, you also have a Direct Loan, and you've made more than the number of payments required for forgiveness on that Direct Loan,
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Erica Harmon: by consolidating it
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Erica Harmon: with your other loans, your FFELs, you'd be giving up a refund of any payments you made beyond the number required for forgiveness.
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Erica Harmon: The US Department of Education has made it clear that refunds will not be available for payments made on FFEL or Perkins loans,
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Erica Harmon: so this refund consideration applies only to consolidating Direct Loans.
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Erica Harmon: Second, if you have Parent PLUS loans, consolidating them with your own student loans will restrict the entire resulting direct consolidation loan to the income contingent repayment, or ICR plan.
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Erica Harmon: unless you are able to take advantage of a special double consolidation loophole to access the SAVE plan which we're going to discuss in a few minutes. While the ICR plan may offer lower payments for borrowers with low loan balances,
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Erica Harmon: The SAVE plan is typically less expensive for borrowers with high loan balances.
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Arwen Thoman: To continue earning credit toward Income Driven Repayment, most borrowers need to apply for an Income Driven Repayment plan by July 1.
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Arwen Thoman: And luckily, as we've mentioned that there is a new and more affordable Income Driven Repayment plan called SAVE.
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Arwen Thoman: The new SAVE plan, is really the most affordable Income Driven Repayment plan in history. Rather than protecting income under 150% of the federal poverty line, as most other IDR plans do, the SAVE Plan protects income under 225%.
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Arwen Thoman: And this means it will cut monthly payments to $0 if you make less than about $33,000 individually, or under $67,500 for a family of 4.
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Arwen Thoman: Another great feature of SAVE is that it eliminates any remaining interest after a scheduled payment is made.
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Arwen Thoman: So, for example, if your loan accrues $50 in interest each month,
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Arwen Thoman: and your SAVE payment is only $30, that remaining $20 in interest
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Arwen Thoman: is not charged, and this prevents your loan balance from growing while you're in the SAVE plan.
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Arwen Thoman: Also married borrowers who file their taxes separately can exclude their spouse's income from their payments calculation. So some of you may want to consider changing your tax filing status next year in order to lower your SAVE payment.
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Arwen Thoman: The chart here illustrates how SAVE payments change based on income and family size.
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Arwen Thoman: And, for example, someone with a family size of 3, making $60,000 per year would have a $34 monthly payment.
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Arwen Thoman: And there will be more improvements coming to the SAVE Plan.
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Arwen Thoman: First, and perhaps most notably, payments for undergraduate loans will be cut in half in July of 2024. Secondly, the SAVE plan is offering shorter forgiveness windows for borrowers with low balances.
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Arwen Thoman: If your original loan balance was $12,000 or less, you'll receive forgiveness after 10 years of payments instead of the traditional 20 or 25 years.
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Arwen Thoman: This 10 year period will increase by one year for every additional $1,000 that you borrowed. So, for example, if your original loan balance was $14,000,
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Arwen Thoman: You'll see forgiveness after 12 years.
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Arwen Thoman: So unless your balance, your original loan balance, was $21,000 or less, SAVE will offer forgiveness after 20 years, provided that you only have undergraduate debt.
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Arwen Thoman: If you have any graduate school debt, the forgiveness timeline under SAVE will be 25 years.
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Arwen Thoman: Similarly, Parent PLUS borrowers who use this double consolidation loophole that we're going to talk about to access SAVE, they'll also have a 25-year forgiveness timeline.
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Arwen Thoman: If you're enrolled in the income contingent repayment plan known as ICR, your forgiveness timeline will be 25 years, regardless of whether the loans were taken for graduate or undergraduate studies.
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Arwen Thoman: but after making payments in ICR, eligible borrowers can switch to SAVE to access the shorter forgiveness timeline, that 20-year timeline, if they only have undergraduate debt.
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Arwen Thoman: If you're in the pay as you earn plan, known as PAYE, the forgiveness timeline is 20 years, regardless of whether you had undergraduate or graduate debt.
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Arwen Thoman: But unfortunately, very few of you will be eligible for PAYE due to how old your FFEL program loans are.
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Arwen Thoman: And it's important to understand that under the payment count adjustment you'll begin earning forgiveness on the date your loans first entered repayment,
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Arwen Thoman: and you'll continue earning credit toward forgiveness for each month in which your loan was in a repayment or a qualifying forbearance or deferment.
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Arwen Thoman: If you had a direct consolidation loan, you'll earn forgiveness, beginning on the date of the oldest original loan
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Arwen Thoman: that went into the consolidation first entered repayment.
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Arwen Thoman: Now most of you will be prompted to apply for Income Driven Repayment when you consolidate your loans.
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Arwen Thoman: But if for some reason you're not consolidating, or you forgot to apply at the time that you consolidated, you can apply for SAVE or another Income Driven Repayment plan online at studentaid.gov/idr.
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Arwen Thoman: The online application is really more efficient and allows you to see your payments before you apply, which is nice, but if you have to, you can apply by downloading a PDF of the income driven repayment application available at studentaid.gov/forms-library.
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Arwen Thoman: Alright, now we're going to try to talk about the Income Driven Repayment options for Parent PLUS loans, including this double consolidation loophole. And we do want to note up front that we have some very detailed step by step instructions for how to access this loophole.
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Arwen Thoman: We definitely encourage you to visit our website at mass.gov/ago/parentplus to take a look at these detailed instructions if you think that you can benefit from the loophole, because while we're going to go over it briefly here, we're not going to be telling you enough to actually use the loophole.
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Arwen Thoman: Alright, so unconsolidated Parent PLUS loans - Parent PLUS loans that have never been consolidated - they're technically not eligible for any Income Driven Repayment plan, including the new SAVE plan.
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Arwen Thoman: However, until July 1 of 2025, Parent PLUS borrowers with at least 2 Federal loans can use a double consolidation loophole to access SAVE.
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Arwen Thoman: For this loophole to work, you basically have to consolidate any Parent PLUS loan that you have twice.
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Arwen Thoman: But you have to structure these consolidations in a particular way. Unfortunately, if you only have a single Parent PLUS loan
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Arwen Thoman: or a single direct consolidation loan that paid off one or more Parent PLUS loans you can't use the loophole, but you can in that circumstance apply for the income contingent repayment plan, the ICR plan,
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Arwen Thoman: after the Parent PLUS loan has been consolidated into a direct consolidation. The ICR plan does count as a qualifying payment for purposes of Income Driven Repayment forgiveness,
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Arwen Thoman: but it often has higher payments than SAVE, particularly for borrowers with larger loan balances. That's really why we promote the loopholes as often SAVE
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Arwen Thoman: offers lower payments to borrowers with large balances.
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Arwen Thoman: To illustrate how this double consolidation loophole works, if you had 2 Parent PLUS loans.
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Arwen Thoman: and you consolidated each one of those Parent PLUS loans separately into 2 direct consolidation loans,
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Arwen Thoman: and then consolidated those 2 consolidation loans together, your final consolidation loan would be eligible for the SAVE plan. But remember, you only have until July 2025, to complete all the necessary consolidations in order for that final direct consolidation loan to be eligible for SAVE.
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Arwen Thoman: and in many cases there are going to be advantages to getting it done before the April 30 deadline for the payment count adjustment so that you can maximize your credit toward forgiveness under the adjustment.
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Arwen Thoman: Again, we just want to reiterate a recommendation that you review the detailed step by step instructions on this process that are located on our webpage at mass.gov/ago/parentplus.
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Arwen Thoman: Alright, so, for everyone pursuing Income Driven Repayment forgiveness, be they parent or student borrowers,
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Arwen Thoman: We need you to be aware that the standard repayment plan for consolidation loans,
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Arwen Thoman: the graduated repayment plan and the extended repayment plan, they do not qualify toward Income Driven Repayment forgiveness. So, although the government is saying look, we know a lot of people were in these plans historically, we're going to give you credit for the payments you made under these plans historically, that's all ending in July.
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Arwen Thoman: So if you're in one of these plans, you need to apply by July 1 to switch to an Income Driven Repayment plan in order to continue earning credit toward IDR forgiveness.
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Arwen Thoman: Now we do run into folks who say, but I can't afford these Income Driven payments, they're higher than what I'm paying now, and they're just really unaffordable, and this usually arises with higher income borrowers or borrowers who are married filing taxes jointly. So if you find your yourself in the situation, there are potentially a couple of avenues to explore.
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Arwen Thoman: First, you could ask your servicer to place you in the 10 Year Standard Plan, which does count as a qualifying repayment plan for Income Driven Repayment forgiveness.
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Arwen Thoman: Now, if you're fairly close to having the number of months that are needed for loan forgiveness, it's possible that you could pay into the 10 Year Standard Plan for a while and still end up with a balance left to forgive.
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Arwen Thoman: Secondly, if you're married and you file your taxes jointly with your spouse, you could consider changing your tax filing status to married filing separately. If you do this, your income driven payments will be calculated using only your income.
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Arwen Thoman: And you'll have to sort of discuss with a tax professional what you'd be giving up by filing
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Arwen Thoman: separately on your tax refund and compare this to the potential savings on your income driven payment amount.
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Arwen Thoman: Alright. Before wrapping up here, we do want to take a minute to talk about how we think about the decision that all of you are facing in terms of whether to consolidate by April 30 to pursue the payment count adjustment.
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Arwen Thoman: Now, if you've been in repayment for nearly 20 or 25 years, consolidating into the Direct Loan program by April 30
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Arwen Thoman: is almost certainly the right decision, and that's because you're going to be so close to forgiveness. But if you've been in repayment for less time, or you have a low loan balance,
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Arwen Thoman: it may be harder to anticipate, whether you'll receive the forgiveness, and that makes this decision a little tougher.
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Arwen Thoman: And part of this is, it depends on how much you'll have to pay each month in order to continue earning credit for forgiveness, and whether those payments will pay off your loan balance before you reach forgiveness.
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Arwen Thoman: Now, since many of you won't be able to tell exactly how much credit you'll receive through via the payment count adjustment,
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Arwen Thoman: and since the downsides of consolidation are usually quite minimal, we generally suggest consolidating into the Direct Loan program before April 30, so that you can receive the adjustment and find out how close you are to forgiveness.
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Arwen Thoman: At that point, those of you who are facing higher payments under an income driven plan, the 10 Year Plan, you can then weigh whether it's worth it to continue making those higher payments in order to receive forgiveness.
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Arwen Thoman: The only real exception to this is if you stand to lose a significant borrower benefit interest rate reduction
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Arwen Thoman: by consolidating. And again, those reductions are pretty rare, and even if you have them, depending on how close you are to forgiveness, and how much you'll have to pay each month in order to keep earning credit for forgiveness, despite the reductions it may still be worth consolidating.
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Erica Harmon: So we will just summarize the steps that you need to take to benefit from the adjustment. First, you're going to need to log into your studentaid.gov account to review your federal loan types to see which loans you need to switch into the Direct Loan program through consolidation.
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Erica Harmon: And while that letter or email we sent to many of you noted that you have some FFEL loans that need to be consolidated, it's important to verify that you don't have other non-Direct Loans.
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Erica Harmon: Second, you need to apply to consolidate all of your non-Direct Loans into the Direct Loan program by April thirtieth of this year.
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Erica Harmon: Third,
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Erica Harmon: even if you also have some Direct Loans,
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Erica Harmon: you should evaluate whether consolidating all your loans together by April 30, including your Direct Loans could help you get forgiveness faster. And this is going to be a consideration for those of you with loans that have been in repayment for different lengths of time.
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Erica Harmon: And finally, to keep earning credit towards IDR forgiveness, you'll need to apply for an Income Driven Repayment plan
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Erica Harmon: like SAVE or ICR by July 1 of this year.
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Erica Harmon: So we have tried to clearly lay out the steps that you need to take to benefit from the payment count adjustment, and we hope you feel more confident about what you need to do. Thank you for joining us today.