On July 14th, 2023 the U.S. Department of Education announced the latest implementation of the multi-step approach to address longstanding failures associated with student loan payment count tracking for the purpose of forgiveness. Formerly announced as the IDR Account Adjustment or ā€œIDR Waiverā€ in April of 2022, this collection of fixes is designed to give borrowerā€™s an easier path to repayment by changing key aspects of the collection procedures employed by student loan servicers, and crediting borrowers months and years toward forgiveness that were previously undercounted or technically disqualified.

One of the fixes included in this approach is the one-time account adjustment to count certain long-term forbearances toward IDR and PSLF forgiveness. This account adjustment means that:

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  • Any borrower who was put into a forbearance by their student loan servicer for a period of more than 12 months or any borrower who received more than a total of 36 months of forbearance from their servicer will be able to have all of the months of forbearance in either circumstance counted toward repayment.
  • Any time spent in deferment prior to 2013, with the exception of in-school deferment, will be counted as repayment for the purpose of this adjustment.
  • Any time spent in economic hardship deferment or military deferment after 1/1/2013 will be counted as repayment for the purpose of this adjustment.
  • All months spent in the income-based forgiveness program automatically count as repayment.Ā 
  • All months spent in the Covid-19 forbearance from March 2020 to present will also count as repayment.
  • The U.S. Department of Education has committed in writing to begin the process of loan forgiveness for any borrower who has been in repayment for more than 20 years for undergraduate loans, or 25 years for graduate loans, within 30 days of July 14, 2023.

What does this mean for Hope Credit borrowers?

If you are a Hope Credit client who is has been in the modified definition of repayment for more than 20 or 25 years, the process of forgiving your student loans should begin within 30 days of July 14th, 2023. Your Hope Credit case worker can help you determine if you meet this criteria based on the historical data of all of your federal student loans. However, the U.S. Department of Education has also committed to making this determination automatically. 

Dozens of Hope Credit clients have already been notified by the U.S. Department of Education that their loans are scheduled to be forgiven with the next 30 days. The letters can come by mail or electronically and state ā€œThe Department of Education will work with your servicer to process your forgivenessā€. The notification then explains the next steps, referencing a date of 8/13/23 when this determination will be disclosed to your student loan servicer. The notification also mentions that it may take ā€œsome timeā€ for your student loan servicer to process the forgiveness. Hope Credit will continue to update our clients as we gain more information from affected clients as to what a more measurable and predictable average of ā€œsome timeā€ will be. 

Check My Eligibility for Relief

An estimated 804,000 borrowers are eligible for up to $39 billion in loan forgiveness under this one-time adjustment from the U.S. Department of Education. This brings the total amount of student loan forgiveness for a variety of circumstances to more than $100 billion, including $42 billion approved for forgiveness under the PSLF Waiver and $19 billion forgiven under Borrower Defense to Repayment, Closed School Discharge, and Total and Permanent Disability Discharge.