Borrowers awaiting student loan forgiveness have until April 30th to request loan consolidation, which merges federal loans into one. This could accelerate forgiveness, as you'll receive credit for all payments since your first loan, regardless of its disbursement date. However, remember that consolidation may reset the forgiveness timeline, so consult an expert before proceeding.
The Biden administration has released the proposed rules for its revised student loan forgiveness plan. It could reduce or eliminate debt for certain borrowers, including those eligible for existing cancellation programs, in long-term repayment, at questionable schools, or in financial hardship. Borrowers may also get up to $20,000 of unpaid interest forgiven. The plan is still subject to public comment and will likely be finalized and implemented in the fall.
To get student loan forgiveness, borrowers with multiple federal loans can consolidate them into one loan by April 30. This will qualify them for income-driven repayment plans, where monthly payments are based on their income. Changes in these plans have already led to debt cancellation for many borrowers. By consolidating, borrowers can combine timelines and qualify for forgiveness faster.
The Biden administration's updated bankruptcy policy makes it easier for borrowers to discharge student loan debt. Borrowers can now apply for a discharge by completing a form outlining their financial hardships. Although bankruptcy can be beneficial for individuals in extreme financial distress, most should explore other options like income-based repayment plans and loan forgiveness programs. The government may also announce a revised student debt forgiveness package soon, so waiting to see what relief is available is advisable.
