Frequently Asked Questions

Income Driven Repayment or IDR is a group of programs that were developed by the US Department of Education to allow qualified borrowers the opportunity to have their monthly payment amounts determined according to their current level of income. There are currently 4 existing IDR plans - ICR (Income Contingent Repayment), IBR (Income Based Repayment New & Old), PAYE (Pay As Your Earn), & SAVE (Saving on a Valuable Education).  Each Program has specific qualifications, benefits and restrictions for individual borrowers.  All programs are designed to aid borrowers in keeping monthly payments in line with their income level instead of being based on their overall loan balance.

The IDR Waiver - or Income Driven Repayment Plan Waiver - was introduced in April of 2022.  This waiver was created to address the large number of borrowers that exist who have been paying on older Federal Loans and may have been able to qualify for long term forgiveness programs, but had not been enrolled in a qualifying IDR plan.  The US Department of Education has committed to a one time adjustment of the repayment counts on any borrower account that qualifies starting at some point in 2023/2024.  They will automatically begin auditing any qualifying accounts without the need for an application.  Many borrowers with loans before 2010, who may have made repayments in a non qualifying plan, would need to consolidate their existing loans into Direct loans & sign up for an IDR plan in order to qualify for the one time account adjustment.  Borrowers with commercially held FFEL loans need to consolidate into Direct loans by April 30, 2024 in order to take advantage of the IDR Waiver.

Student Loan payments have currently been on a Covid Pause since March of 2020. During this time frame no interest has accrued on any US Dept of Education owned federal student loans & no payments were required to be made towards these loans. It is important to note that all months during the Covid Pause will count towards PSLF or Long Term Forgiveness for borrowers who are already eligible or become eligible through the newly introduced waivers. Payments restarted on September 1, 2023.

THIS APPLICATION HAS BEEN CLOSED

The Application for Student Loan Forgiveness can be found as a direct link at the top of the homepage on Studentaid.gov or can be accessed directly at www.studentaid.gov/debt-relief/application. As of Oct 17, 2022 this application was live but has been suspended as of November 11, 2022 pending a legal challenge. Should the US Dept of Education win the legal challenge, currently being deliberated in the Supreme Court, the application will reopen and remain open until December 31, 2023. We will keep updating this FAQ as new information is released.

Parent Plus Borrowers do not have access to any IDR plans unless they consolidate their Parent Plus Loans.  One consolidation will give them access to ICR - Income Contingent Repayment - which is the least generous of all the income driven plans.  Two consolidations with multiple Parent Plus Loans - also know as the Double Consolidation Loophole - allows Parent Plus borrowers to get access to the more generous IDR plans.  However the Double Consolidation Strategy involves multiple consolidations with multiple Loan Service Providers and is not recommended unless assistance from a knowledgable student loan professional is sought.

PSLF or Public Service Loan Forgiveness is an option for borrowers who work for an eligible public service employer.  In this program the borrower must make 120 payments or 10 years of payments while working for an eligible employer and while enrolled in an income driven repayment plan.  After the 120th payment all remaining loan balances will be forgiven.  No federal tax is ever due on the forgiven balance under the PSLF program.

Long Term Forgiveness is an option for borrowers who do not qualify for PSLF because they do not work for a qualifying employer, but they are enrolled in an income driven plan.  Depending on the IDR plan they are enrolled in, Long Term Forgiveness Borrowers need to make 20 or 25 years of payments and then any loan balance that is left will be forgiven. Currently no federal tax is due on the forgiven amount but that rule could change by 2026.

The PSLF Waiver was enacted in October of 2021 and expired on October 31, 2022.  It allowed borrowers who may have been working for eligible employers but were not in the correct repayment plan to have their accounts audited and their payments recounted as if they had been in an eligible repayment plan.  Periods of economic hardship and forbearance will also count towards the 120 payment goal for forgiveness.  In order to qualify for the waiver the borrower must have had direct loans and would need to consolidate FFEL loans into direct loans and enroll in an IDR plan if not already in one. Borrowers who missed the deadline can continue to apply for most of the identical benefits through the IDR Waiver.

The Standard Loan Repayment Option is the 10 year amortized loan repayment plan that borrowers will automatically be placed in if they do not enroll in an IDR plan or other option when their loans come due.  It is basically the loan payment and interest divided into 120 equal payments - or 10 years of the same payment to pay off the entire principal and interest balance.

Consolidation and Refinancing are dependent on the individual borrower and their financial circumstances.  Consolidation can be helpful in many situations especially when the borrower has older loans that do not qualify for IDR plans without consolidation or for Parent Plus borrowers who do not qualify for IDR plans without consolidation.  Federal loans have many forgiveness and income driven options that borrowers refinancing into private loans would not have access to.  But for borrowers who do not qualify for IDR plans because of higher income levels - refinancing can lower interest rates for the life of the loan. It is always best to explore all options on paper before making a final decision.