New rules for cancellation of public service loans

Borrowers can get credit for partial late payments

Under these new rules, which take effect on July 1, 2023, federal borrowers can get credit for payments that were not previously eligible. These may include partial, late or lump sum payments, payments made under a different repayment plan and credit for deferment and deferment periods.

To qualify, you must have a direct loan. If you have either a Federal Family Education Loan (FFEL) or a Federal Perkins Loan, you now have until July 2023 to consolidate your loans into Direct Loans with your servicer.

See the Consolidation Loan Application to find out what you need to apply. Since the process may take a few months, borrowers must apply for consolidation by May 1, 2023, ministry officials said.

The plan also makes permanent some of the changes the Biden administration put in place a year ago, with a limited waiver ending Oct. 31.

Now, a borrower who misses the October deadline will have another chance to have their payment counted again if they were disqualified due to their loan type or repayment schedule.

Changes bring many loans closer to forgiveness

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