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The Biden administration is in various stages of implementing multiple student loan forgiveness initiatives. But depending on what program borrowers apply for and when they submit their loan forgiveness application, there could be wildly different timelines for receiving relief.

Here’s what borrowers can expect.

When Borrowers Can Expect Relief Under Biden’s One-Time Student Loan Forgiveness Plan

Under Biden’s one-time student loan cancellation initiative announced in August, borrowers with government-held federal student loans can receive up to $20,000 in student loan forgiveness. To be eligible, single and married-filing-separately borrowers must have earned under $125,000 in either 2020 or 2021, and married-filing-jointly borrowers must have earned under $250,000.

The Education Department released an online application last month, and over 20 million borrowers have already applied. Top administration officials indicated that applications will be processed on a rolling basis through 2023, and they expected a four-to-six week turnaround time between when a borrower submits an application and when they receive student loan forgiveness. Officials had urged borrowers to apply by November 15 to ensure that they received loan forgiveness by the time the national student loan payment pause ends at the end of the year.

But legal challenges have potentially scrambled this timeline. A federal appeals court temporarily blocked the initiative pending consideration of legal arguments submitted by the Biden administration and a coalition of Republican-led states seeking to block the plan. During the temporary stay, the Education Department can accept student loan forgiveness applications, but cannot process them. If the stay gets lifted, officials indicate that they intend to move “full speed ahead” in implementing the program. But until the court issues its next ruling, the timeline on this initiative is going to be unclear.

Student Loan Forgiveness Under the Limited PSLF Waiver

The Biden administration created the Limited PSLF Waiver last year to address ongoing issues with Public Service Loan Forgiveness, a federal student loan forgiveness program geared towards borrowers who commit to working for nonprofit or government organizations. Under the waiver, the Education Department can retroactively count past loan periods as “qualifying payments” towards loan forgiveness under PSLF that previously would have been rejected. This includes past periods of repayment, as well as certain past periods of deferment and forbearance.

Through the Limited PSLF Waiver, many borrowers will advance their progress towards eventual loan forgiveness. Those who cross the threshold of 120 qualifying PSLF payments as a result of the waiver will have their qualifying federal student loans discharged.

The Limited PSLF Waiver officially ended on October 31. But The Education Department is still processing applications. Here’s what to expect in terms of timing:

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  • Some borrowers needed to consolidate their loans through the federal Direct consolidation program to qualify for student loan forgiveness under the Limited PSLF Waiver. The consolidation process can take 30 to 60 days, but according to the Education Department, a consolidation application will be considered timely if it was submitted online at StudentAid.gov by October 31.
  • MOHELA, the Department of Education’s contracted PSLF loan servicer, will conduct an initial review of PSLF Employment Certifications submitted by the borrower. This process can take at least 90 days, but it could take longer. And that initial review may simply determine whether the employer qualifies; MOHELA may not initially count all PSLF payments as “qualifying.” This is normal (although certainly frustrating for many borrowers).
  • After MOHELA conducts its initial review, the Education Department will then review the borrower’s account and instruct MOHELA to update the borrower’s PSLF payment count in accordance with the Limited PSLF Waiver rules. This part of the process could also take several weeks or even several months. The Education Department is only now starting to make adjustments to PSLF payment counts to include qualifying forbearance periods.

Thus, for some borrowers, receiving relief through the Limited PSLF Waiver program could take many months, and borrowers should be prepared for a long process.

When Borrowers Will Receive Student Loan Forgiveness Under the IDR Account Adjustment

The Biden administration is in the early stages of rolling out yet another loan forgiveness program, called the IDR Account Adjustment. Similar to the Limited PSLF Waiver, this initiative will allow the Education Department to retroactively count past loan periods (including past periods of repayment and many periods of deferment and forbearance) towards a borrower’s 20-year or 25-year loan forgiveness term under Income Driven Repayment (IDR) plans, even if they are not presently in such a plan.

The initiative will be implemented automatically for borrowers who have government-held federal student loans next summer, with a target implementation date of July 1, 2023. Borrowers who accrue enough past credit under the initiative to reach their 20-year or 25-year IDR term will see automatic loan forgiveness. The IDR Account Adjustment will also benefit PSLF borrowers, effectively providing many such borrowers with a second shot at relief if they missed the deadline for the Limited PSLF Waiver.

Some borrowers will need to consolidate their loans through the Direct consolidation program to qualify of maximize the benefits. “To receive this credit toward IDR… a borrower must have Direct Loans or FFEL loans managed by the Department,” according to an Education Department face sheet. “Borrowers who have other types of federal loans have to consolidate into the Direct Loan program to receive the credit…. All borrowers must apply for consolidation by May 1, 2023, to get the full benefits of the one-time account adjustment.”

Further Student Loan Forgiveness Reading

Sweeping New Rules Will Curtail Student Loan Interest And Expand Loan Forgiveness Programs

A New, Bigger Student Loan Forgiveness Initiative Is Set To Launch — And It’s Not The One That You Think

In Reversal, Biden Administration Announces New Eligibility Limits On Student Loan Forgiveness

Applying For Student Loan Forgiveness? Don’t Make These 3 Mistakes

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