INDIANAPOLIS — Full or partial federal student loan forgiveness could be around the corner for you.
But, the Department of Education says there is a step you may need to take to get the maximum benefit.
That step is filling out an application to consolidate your federal student loans by Tuesday, April 30 at midnight.
If you have a handful of student loan IOUs to Uncle Sam, this pushes them into one pile.
There is no cost to consolidate your loans.
The Department of Education said, "to get the most credit toward loan cancellation, borrowers with the types of federally managed loans listed below must consolidate them:"
- Commercially held Federal Family Education Loan (FFEL)
- Parent PLUS loans
- Perkins loans
- Health Education Assistance Loan (HEAL) Program loans
They go on to say that after you take this step, "your new debt consolidation loan is eligible for the one-time adjustment, and more of the payments you have made up to this point will be counted toward loan cancellation."
The one-time cancellation is happening to adjust the forgiveness programs that already exist.
They are Income Driven Repayment Plans, Public Service Loan Forgiveness and those interested in Income Driven Repayment plans with Direct or FFEL loans with the Department of Ed.
For these types of plans, borrowers make a number of qualifying payments, then the remainder of the loan is forgiven. For example, Public Service Loan Forgiveness, signed by President George W. Bush in 2007, requires 120 qualifying payments.
But borrowers say some of their qualifying payments were missing, so this adjustment is serving as a recount.
The Federal Student Aid's site says disadvantages of consolidating can include longer repayment periods, more interest and lost of certain borrower benefits.
If you have questions, there are also help lines you can call.