Deadline Approaching: What You Need to Know About FFEL Changes

If you have privately held Federal Family Education Loans (FFEL) and are making payments, act quickly. The Education Department is offering a one-time account adjustment. To qualify, consolidate any non-federally held FFEL loans into a Direct loan by the end of 2023. This can correct your account and bring you closer to debt relief. Don't miss the deadline to keep important benefits regarding student loans.

Key takeaways

• FFEL borrowers with privately held loans need to consolidate before year's end to qualify for relief
• Over 800,000 borrowers have enjoyed debt forgiveness through the one-time adjustment mechanism
• The Education Department continues to look for long-term relief options, with full measures expected by July 2025

Crucial countdown for borrowers looking for loan relief

Time is of the essence for student loan borrowers looking to capitalize on debt relief options. The deadline to apply for a one-time account adjustment offered by the Education Department is quickly approaching; it's a key moment for people with Federal Family Education Loans (FFEL) specifically.

Understanding the FFEL consolidation deadline

If you have FFEL loans managed by private lenders, you need to act fast. To get the benefits of corrective account adjustments, you need to consolidate these loans under a Direct loan before the end of 2023.

This can really help you get closer to full debt relief. But, if you don't consolidate on time, you might lose out on important benefits.

TuitionHero Tip

If you have an FFEL loan and haven't started this process, now is the time to submit your consolidation application.

Relief is already in progress

This isn't just a promise - real progress is happening. The one-time adjustment allows borrowers with Direct loans to count their previous payments towards their 20 years of payments when they switch to an income-driven plan.

More specifically, under income-driven repayment, your debt is forgiven after 20 years of payments. However, because this wouldn’t normally include payments you’ve already made before switching, the government is offering a one-time adjustment.

Over 800,000 borrowers already had their loans forgiven through this one-time adjustment. The Education Department keeps reviewing borrower accounts every 2 months to help more people.

If you're looking for clear information to understand these changes, check out our TuitionHero website. It has a guide to private student loans. It's a helpful resource for anyone trying to figure this stuff out.

Getting past the SAVE Plan issues

A clear way borrowers can get help is through the Saving on a Valuable Education (SAVE) plan. But, it hasn't gone smoothly.

Lots of borrowers had problems with the servicers. For example, 78,000 borrowers got wrong monthly payment calculations when they joined SAVE.

The Education Department took action by putting these affected borrowers on administrative forbearance. This means they paused the interest and payment requirements temporarily.

If you need quick help or other options, TuitionHero can explain student loan refinancing. It might make your repayment process easier during these tough times.

Long-term relief measures

Even though courts struck down the Biden administration’s first attempt at mass loan forgiveness, the Education Department is still working to help under the Higher Education Act of 1965. The second attempt might take until July 2025, but it shows they're committed to finding solutions for borrowers.

In these uncertain times, borrowers can get advice and look into refinancing options at TuitionHero. They know about FAFSA, scholarships, and credit card offers, making it a great place for financial help tailored to students and parents.

Why trust TuitionHero

At TuitionHero, we help students and parents navigate the financial side of higher education. We offer personalized FAFSA assistance and explain how loan consolidation affects loan forgiveness eligibility. Our resources clarify income-driven repayment plans and Public Service Loan Forgiveness. We support you in exploring options like private student loans, refinancing, and scholarships, while keeping up with the latest changes from the Education Department.

Frequently asked questions (FAQ)

What should I do if my FFEL loan is serviced by a private lender?

If your FFEL loan is handled by a private lender and you want help through the Education Department's account adjustment, you should apply for Direct loan consolidation as soon as you can. Doing this before the end of 2023 is crucial to make sure your payments are recorded correctly and you are eligible for possible forgiveness. For advice on private loans and refinancing, take a look at our complete guide to student loan refinancing.

How can I benefit from the one-time account adjustment if I have an FFEL loan?

If you have an FFEL loan, you can apply for Direct loan consolidation to get the one-time account adjustment. This adjustment can really help you get closer to loan forgiveness, especially if you're on an income-driven repayment plan or qualify for Public Service Loan Forgiveness. Check out our FAFSA help page for help with the application process.

Can TuitionHero help me if I'm affected by the SAVE Plan servicer errors?

Yes, at TuitionHero, we offer tools and resources to help you understand the SAVE plan, especially if you've been affected by servicer errors. We can help you understand your options, including entering administrative forbearance or exploring alternate repayment plans while the issues are being resolved. Our goal is to minimize the financial strain with our student loan resources.

Final thoughts

As we go through these important changes in the student loan world, it's clear that being ready and acting on time is crucial to making the most of your debt relief chances. Whether you have an FFEL loan through a private lender or are dealing with servicer errors in the SAVE plan, these events highlight the importance of staying informed and taking action.

Our dedication at TuitionHero stays strong, to give you the tools you need today for a financially secure tomorrow. For more help and support, rely on us and our resources on student loan refinancing.

Source

• Statement from President Joe Biden on Student Loan Debt Cancellation for More Than 800,000 Borrowers | The White House
• Student Loan Servicers Ordered to Refund Many Borrowers After Widespread Billing Errors | Nasdaq.
• Payment Count Adjustments Toward Income-Driven Repayment and Public Service Loan Forgiveness Programs | Federal Student Aid
• Some student-loan borrowers are set to lose out on debt relief if they don't take action by the end of the year
• Federal Family Education Loan (FFEL) Program Audits