More than 800,000 longtime federal student loan borrowers who were in repayment for at least 20 or 25 years saw their student loans erased in July as a result of the income-driven repayment account adjustment. Millions of newer borrowers will benefit from the program in 2024, even though they won’t get loan forgiveness just yet.
How much IDR credit will I get? To find out how much credit toward IDR forgiveness you’ll receive under the one-time IDR account adjustment, you can tally past payments yourself. Generally, borrowers get IDR forgiveness after 20 or 25 years on an IDR plan, or 240 or 300 monthly payments, which are capped at a certain percentage of their income.
Once student loan payments resume in October, only full, on-time payments under an IDR plan will count toward the forgiveness finish line. You won’t earn IDR credit for any months you skip payments during the 12-month student loan on-ramp. These types of loans must be consolidated to receive IDR credit if they don’t reach the forgiveness threshold:
For borrowers who anticipate having a leftover balance after the account adjustment, enrolling in an IDR plan now is very important, says Mike Pierce, executive director of the Student Borrower Protection Center, a nonprofit that advocates for student debt relief. This will allow borrowers to continue making progress toward IDR loan forgiveness once payments restart, he says.
Learn more: How to sign up for SAVE, the student-loan repayment plan Biden officials are calling a ‘game changer’