Student Loan Relief Deadline Approaching For 300,000 California Borrowers

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To meet the June 30 deadline, borrowers must submit applications to consolidate their loans into so-called direct consolidation loans. Only loans in the direct program are eligible for loan forgiveness after 10 or 20 years of payments, depending on a borrower’s employment situation. Direct loans also qualify for lower monthly payments.

Between March 20 and May 1, Damian communicated by phone or email with 1,400 borrowers after her office sent an email to Californians who’d likely benefit from loan consolidation. The old loans qualify for federal loan forgiveness programs with less generous repayment plans and require more years of repayment.These loans are also ineligible for Public Service Loan Forgiveness, a loan program for government and nonprofit workers that forgives federal undergraduate and graduate student loan debt after 10 years of payments.

Loans in periods of deferment will count, but only before 2013. If loans were deferred because a borrower re-entered college, such as to complete a bachelor’s or earn a master’s degree, that time won’t count toward the borrower’s credit.that’s less generous, and consolidating those loans with other loans will block the borrower from the newer repayment plans.

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