Don’t miss out on this special one-time forgiveness count adjustment opportunity.
All that changed with the April 19th, 2022 announcement from the Dept of Education (ED). To paraphrase the current President, this is the big f-ing [student loan] deal that you’ve been waiting for to alleviate your student debt stress, particularly those of you who have been in repayment for a decade or more.
If you haven’t looked closely at your student loans for 10 years or more, or you graduated veterinary school around 2014 or before, you really should pay very close attention to the recently announced changes.
Check out the special Climbing Mt. Debt Case Study video showing how one veterinarian may save more than $65,000 in loan repayment costs using the one-time forgiveness count adjustment:
Thankfully, most borrowers won’t have to do anything to benefit from the new changes. However, some will. The problem is that it is not obvious who needs to act and who does not to make sure you are considered for the special one-time forgiveness count adjusment.
Anyone with federal student loans is now eligible for forgiveness, regardless of the repayment plan(s) you’ve been using.
But let’s say you graduated veterinary school in 2000 and for whatever reason have a balance remaining on your federal student loans. Under the one-time forgiveness count adjusment, you could be eligible for forgiveness consideration for the last 20+ years of repayment. This would mean that you have less than 3 years before any remaining balance would be forgiven. Essentially, your previous repayment time (and some deferment/forbearance time) will be adjusted to count towards the forgiveness progress normally reserved for income-driven repayment plans.
How do I know if I need to do anything with my loans to be considered for automatic forgiveness?
If you find privately/commercially held FFELs in your student loan portfolio, then you need to consolidate those FFELs into a federal Direct Consolidation Loan before the end of April 2024 to be eligible for forgiveness consideration.
How do I identify a federally held vs. privately held FFEL?
Next, look for your federal student aid data file on the Aid Summary page of your Dashboard. You are looking for a button/link to “Download My Aid Data.” That will generate an ugly-looking text file (TXT) that contains all of your federal student loan borrowing history. There is a video tutorial available on the VIN Foundation My Student Loans page to help you locate your student aid data file.
However, if you do not see a “DEPT OF ED” ahead of your loan servicer name for your FFELs, then you have privately managed or “commercially held” FFELs. These are the loans that must be consolidated into a Direct Consolidation Loan before the end of April 2024
2023 to be eligible for forgiveness consideration.
What if I find privately held FFELs in my federal student loan portfolio?
To keep your loan portfolio as simple as possible, choose a loan servicer that keeps as much of your portfolio with the same servicer as possible. For example, in the image above showing both federally held and privately held student loans, consolidate the privately held loans only, and choose the loan servicer who manages your federally held loans (Aidvantage in the image). Be aware that consolidation will add any unpaid interest you have to your principal for the loans being consolidated. Using the image above again as an example, consolidating the privately held loans with Navient into a Direct Consolidation Loan to be managed by Aidvantage will also capitalize the $5,619 of unpaid interest to the principal. The resulting Direct Consolidation loan for the example will have a principal balance of $184,877.
Capitalization is not a reason to avoid consolidation. The special forgiveness consideration will generally outweigh the impact of any unpaid interest capitalization. However, you may want to do a good “physical exam” of your student loans with the help of VIN or VIN Foundation on the freely available Student Debt Message Board areas before you consolidate to be sure it makes the most sense for you.
Some additional good news: Any privately/commercially held FFEL balance you consolidate will also be eligible for the pandemic forbearance benefits, recently extended into 2023, possibly through August 2023. that are in place through at least December 31, 2022. Whichever repayment plan you choose, no interest and no payment will be due through the remainder of that period. However, to assure that your post-consolidation and post-special-forgiveness-recount repayment time is forgiveness eligible, choose an income-driven repayment plan.
A few minutes of your time to save significant time, money, and stress on your student loans
This all probably sounds like a lot of work. Actually, it takes longer to write it out than it does to do these steps. But for many of you who have been in student loan repayment for a long time, this is well worth the small effort to maximize these special benefits.
Ideally, once the one-time forgiveness count is complete (by July 1, 2024), you will have a better idea of the exact number of months and years of qualifying student loan forgiveness time. Some will even receive retroactive forgiveness if they surpass 20-25 years of eligible repayment time (likely 25 years for most veterinarians). Any payments made beyond that forgiveness period will be refunded to you. Bonus!
Borrowers who have reached the required number of years in repayment to receive forgiveness should receive word as their loans are reviewed. All others will see their count adjustments applied before July 1, 2024.
Again, this is a big f-ing deal. Student loan forgiveness could be closer than you realize, particularly if you have been paying on your student loans for a long time. Don’t miss out on this unique opportunity to rid yourself of your remaining student loan debt sooner and cheaper.
If you need student debt help, reach out to VIN and VIN Foundation. We have free online tools like the VIN Foundation Student Debt Center and special message board areas to help you make sense of your options. If you have questions on any of the available tools and options, reach out to email@example.com – we’re here to help!