Millions Get Closer to Student Loan Forgiveness With a One-Time Account Adjustment

The U.S. Department of Education will adjust borrowers’ accounts to retroactively give payment credits toward two loan-forgiveness programs.

By , Attorney

On April 19, 2022, the U.S. Department of Education announced it would use one-time account adjustments to retroactively credit millions of borrowers with additional payments toward loan forgiveness. These adjustments will help borrowers eventually qualify for loan forgiveness through income-driven repayment (IDR) plans and under the Public Service Loan Forgiveness (PSLF) program.

Why Is the Government Giving Retroactive Payment Credits?

In recent years, loan servicers often steered student loan borrowers into forbearances. (A "forbearance" allows a borrower to stop making payments, but the debt keeps accumulating interest, increasing the loan balance.)

But servicers were supposed to advise borrowers about different options, including IDR plans. This kind of plan might have reduced borrowers' payments to as low as $0 per month and led to loan forgiveness of any remaining balance after 20 or 25 years of qualifying payments (or after 10 years for PSLF). So, borrowers that were inappropriately placed into long-term forbearances missed out on making progress toward IDR and PSLF forgiveness.

Also, forbearances were supposed to be limited to no more than 12 months at a time and no more than 36 months in total. But servicers regularly allowed borrowers to stay in forbearance for more extended periods. And servicers frequently didn't accurately record borrowers' qualifying payments on IDR plans, having no system to track payments or identify when borrowers qualified for loan forgiveness.

Steps to Help Borrowers Achieve Loan Forgiveness

Here are the one-time adjustments the Department of Education will make.

  • Any months that borrowers made payments on Direct Student Loans and federally-managed Federal Family Education Loan Program (FFEL) loans will count for IDR, regardless of the repayment plan. Any borrower who made the required number of payments for IDR forgiveness based on this payment-count revision will get automatic loan cancellation.
  • Months spent in payment deferment before 2013 will count as qualifying payments toward IDR forgiveness (except those for which the borrower was still in school).
  • Months spent in forbearances of more than 12 consecutive and more than 36 cumulative months will count toward forgiveness for both IDR forgiveness and the PSLF program. (Borrowers placed into shorter forbearances can ask for an account review by filing a complaint with the FSA Ombudsman at

According to the Department of Education, these changes will be automatically applied to borrowers' accounts later this year.

Effective date: April 19, 2022