For people granted TPD, who are also eligible for IDR AUDIT Forgiveness, Dept. is moving TPD people from TPD forgiveness to IDR Audit forgiveness.  While there is no 3 year income monitoring on TPD anymore, there still is a three year monitoring on TPD for things such as returning to school so moving them to IDR Audit forgiveness will give these people faster forgiveness.  

Forgiveness before 12/31/25 is very good!  That’s when the stimulus bill expires allowing for federal tax waiver on any student loan forgiveness (private or federal).  It’s also when the TPD discharge provision providing for tax free forgiveness has to be re-funded by Congress.  So forgiveness now is Great News!  Even if the IDR Waiver is somehow stopped due to someone filing a court case down the road, it is unlikely to unravel a forgiven loan.  Rather it would most likely stop anyone in the future from obtaining forgiveness.  Of course, someone who has already consolidated their loans for the IDR recount can argue that they relied upon the program’s rules when doing the consolidation, and that laches (a fancy legal term for delay) prevents the creditor from asserting that now.

The new IDR account adjustment going on right now may require that you consolidate your FFEL loans to Direct.  You may also want to consolidate differently dated Direct loans to one consolidation that will re-date all the loans to the earliest repayment date so you get as much credit toward your income driven plan forgiveness as possible.  This is particularly important for anyone who bifurcated their education and had a gap – no matter how small – between degrees.

There is much more information online and at your fingertips than you may believe.

You need to login to studentaid.gov & download your TXT file covering all of your federal loans.  Each loan is listed and for FFEL loans, the Servicer, Lender & Guarantor are listed so you can tell if FFEL is owned by ED or not.  FFEL loans owed by ED are covered by the IDR waiver/account adjustment.  Generally though, if you have a FFEL loan with anyone, including the Department of Education, it usually is best to change it to Direct for multiple reasons such as PSLF, SAVE etc.  There can be reasons not to though – and we’d recommend a strategy session with us where we can go over whether you should consolidate, how to do it, and often be by your side talking you through it.

Pish posh on the 10k forgiveness the Supreme Court recently denied.  This is SO MUCH MORE IMPORTANT!  And a lawsuit was filed yesterday by the New Civil Liberties Alliance on behalf of the Mackinac Center for Public Policy and the Cato Institute in an effort to block it.  So take action now!!!  We are designating extra time over the next few weeks to make sure we are available to walk you through a consolidation and answer any questions you have.   This is expected to result in $39 billion in federal student loan forgiveness to more than 800,000 borrowers.  Don’t delay.  The litigants have already requested a temporary restraining order to put a hold on things.  I suspect that if someone gets a consolidation application in (online can take five minutes) before a TRO order is entered, they would still be counted for forgiveness (but that’s above my paygrade so we don’t really know).  Forgiveness that occurs under the recount will also be tax free as it will occur before the end of 2025.

IDR one time account adjustment:

For many years, student loan servicers steered struggling borrowers into forbearance instead of guiding them toward income driven repayment.  Income driven payment generally caps payments at no more than 10 percent of income, and ultimately leads to loan forgiveness after 20 or 25 years of repayment.  Many of these loan servicers also failed to accurately track borrowers’ progress toward forgiveness.  Some of these companies had no system for tracking payments and identifying when borrowers would qualify for forgiveness.