A key deadline for student loan forgiveness consolidation is just days away. Here’s what to know

Borrowers
hoping
for

student
loan
forgiveness
have
just
a
few
more
days
to
act
before
an

April
30
deadline.

Those
who
ahead
of
the
deadline
request
a
so-called
loan
consolidation
—
which
will
combine
their
federal
student
loans
into
one
new
loan
—
could
get
their
debt
canceled
sooner
than
they
would
have
otherwise.
Some
could
even
see
their

debt
canceled
immediately.

Here’s
what
you
should
know.

Income-driven
repayment
plans, which
date
back
to
1994,
set
borrowers’
monthly
payments
based
on
a
share
of
their
discretionary
income.
Those
payments
are
typically
lower
than
they
would
be
under
a
standard
repayment
plan
—
and,
in
some
cases,
they
can
be
zero.
Depending
on
the
plan,
borrowers
can
get
any
remaining
debt
forgiven
after
10,
20
or
25
years.

One
complicating
factor
for
borrowers
in
these
programs
is
that
they
often
have
multiple
loans
that
have
been
taken
out
at
different
times,
said
higher
education
expert
Mark
Kantrowitz
in
an
earlier
interview
with
CNBC.

“They
get
at
least
one
new
loan
each
year
in
school,
on
average,”
Kantrowitz
said.

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As
a
result,
it’s
common
for
a
borrower
to
be
on
multiple
timelines
for
forgiveness,
one
for
each
of
those
loans.

For
now,
the
Biden
administration
temporarily
offers
borrowers
the
chance
to
combine
their
loans
and
get
credit
going
back
as
far
as
their
first
loan
payment
on
the
oldest
of
their
original
loans
in
that
bundle.

This
could
be
a
good
deal
for
many,
experts
say.

For
example,
say
a
borrower
graduated
from
college
in
2004,
took
out
more
loans
for
a
graduate
degree
in
2018,
and
is
now
in
repayment
under
an
income-driven
plan
with
a
20-year
timeline
to
forgiveness.

Consolidating
before
May
1
could
lead
them
to
qualify
for
forgiveness
on
all
those
loans,
experts
say,
even
though
they’d
normally
need
to
wait
at
least
another
14
years
for
full
relief.

Usually,
a
student
loan
consolidation
restarts
a
borrower’s
forgiveness
timeline,
making
it
a
terrible
move
for
those
working
toward
cancellation.

All
federal
student
loans
—
including
Federal
Family
Education
Loans,
Parent
Plus
loans
and
Perkins
Loans
—
are
eligible
for
consolidation,
Kantrowitz
said.

You
can
apply
for
a

Direct
Consolidation
Loan
at
StudentAid.gov
or
with
your
loan
servicer.

“So
long
as
the
application
is
submitted
by
April
30,
they
should
be
fine,
even
if
the
servicers
take
longer
to
process
it,”
Kantrowitz
said.

Some
borrowers
who
took
out
small
amounts
may
even
be
eligible
for
cancellation
after
as
few
as
10
years’
worth
of
payments,
if
they
enroll
in
the
new
income-driven
repayment
option,
known
as
the

SAVE
plan.

Consolidating
your
loans
shouldn’t
increase
your
monthly
payment,
since
your
bill
under
an
income-driven
repayment
plan
is
based
on
your
earnings
and
not
your
total
debt,
Kantrowitz
said.

The
new
interest
rate
will
be
a
weighted
average
of
the
rates
across
your
loans.

Before
consolidating,
consider
getting
a
complete
payment
history
of
each
loan.
In
doing
so,
according
to
experts,
you
can
make
sure
you’re
getting
the
full
credit
you’re
entitled
to.

You
should
be
able
to
get
a
history
of
your
payments
at

StudentAid.gov
by
looking
into
your
loan
details.
You
can
also
ask
your
servicer
for
a
complete
record.
The
payment
history
counts
when
your
loans
first
entered
repayment,
not
when
the
loan
was
borrowed.

If
a
borrower
believes
there
is
an
issue
with
their
payment
count,
they
can
talk
to
their
loan
servicer
or
submit
a
complaint
with
the
Department
of
Education’s Federal
Student
Aid
unit.

You
should
never
have
to
pay
a
fee
to
consolidate
your
loan,
Kantrowitz
said.
Anyone
who
tries
to
get
you
to
do
so
is
likely
a
scammer,
he
said.