GREENSBORO, N.C. — You've been paying on your student loan for years and years and now you get an email saying you have Automatic Loan Forgiveness? It's happening and it’s for real thanks to the one-time income-driven repayment plan adjustment.
“Everyone needs to sit back and put their patience pants on. If you're someone who is going to be in this first wave, that was announced today, you probably already have an email in your inbox. If you don’t have an email, don’t freak out, don't call your loan servicer, and don’t think there is something wrong. The department is going to do this in batches,” said Betsy Mayotte, President of The Institute of Student Loan Advisors.
Over the next year, the Department of Education will notify more than 804,000 borrowers that their loans are done. Really.
It's all part of the Higher Education Act that was announced in April of 2022 and is being implemented as of today.
A student loan borrower is eligible for forgiveness after making 240 to 300 monthly payments, that's about 20 to 25 years.
“Everyone with a federal direct loan is going to get this adjustment, it's not something you have to apply for.
Most people won't see it until next year unless it's going to give you forgiveness right away, you can't count on seeing it until next year,” said Mayotte.
You can't skip to the front of the line, there's no one you can pay to get the process moving faster.
But Mayotte says if you've been paying on your loan for 15 to 17 years and your loan amount is still much more than your income, you should look at getting on an income-driven repayment plan if you’re not already.