Student Loan Forgiveness Deadline Extended: Don't Miss Out Automatically Reducing Your Debt!

By Madz Dizon

Jun 05 2024, 09:07 AM EDT

Student Loan Payments Set to Halve for SAVE Plan Participants Starting July — An activist holds a cancel student debt sign as they gather to rally in front of the White House in Washington, DC, on August 25, 2022. STEFANI REYNOLDS/AFP via Getty Images

For those with federal student loans, time is running out to increase the amount of loan forgiveness you may be eligible for.

The Department of Education is currently examining previous student loan payment counts to optimize borrowers' debt relief benefits.

If you're looking to determine your eligibility for student loan forgiveness, consolidating specific federal loans may expedite the process.

Why You Might Not Qualify for Student Loan Forgiveness?

Consolidating student loan debt is comparable to refinancing, as it allows you to merge your current federal student loans into a new loan with a fixed interest rate.

If you have FFELP, Perkins, or other non-direct federal student loans, they may not qualify for forgiveness programs.

By consolidating your loans into a new Direct Loan as well as enrolling in an income-driven repayment plan, you may be qualified for automatic loan cancellation, interest forgiveness, or other debt relief benefits.

According to CNET, if you meet the requirements for an IDR plan and have consistently made payments for 20-25 years, your entire balance may be eligible for automatic forgiveness.

Based on the payment plan you select, a consolidation loan has the potential to reduce your monthly payments. However, it is important to note that it may also result in a longer repayment period.

Application Process for Loan Consolidation

Consolidating your federal student loans is a convenient option available to you on StudentAid.gov.

Please ensure that your application is submitted before midnight local time on June 30 in order to meet the deadline. Consolidating after this date would result in missing out on certain benefits.

To complete the application, you will be required to provide your Federal Student Aid ID, along with personal, financial, and loan information.

According to the FSA website, it should take around 30 minutes to finish the loan consolidation application. Feel free to complete the application at studentaid.gov/loan-consolidation, AP reported.

It may take up to 60 days to process your consolidation after you apply. Moreover, there are more options available for loan forgiveness when it comes to private loans.