Waiver Grants Millions Of Borrowers Progress Toward Student Loan Forgiveness Bankrate Caret RightMain Menu Mortgage Mortgages Financing a home purchase Refinancing your existing loan Finding the right lender Additional Resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Bank Banking Compare Accounts Use calculators Get advice Bank reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Credit Card Credit cards Compare by category Compare by credit needed Compare by issuer Get advice Looking for the perfect credit card? Narrow your search with CardMatch Caret RightMain Menu Loan Loans Personal Loans Student Loans Auto Loans Loan calculators Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Invest Investing Best of Brokerages and robo-advisors Learn the basics Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Home Equity Home equity Get the best rates Lender reviews Use calculators Knowledge base Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Loan Home Improvement Real estate Selling a home Buying a home Finding the right agent Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Insurance Insurance Car insurance Homeowners insurance Other insurance Company reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Retirement Retirement Retirement plans & accounts Learn the basics Retirement calculators Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Advertiser Disclosure

Advertiser Disclosure

We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.

How We Make Money

The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: Phynart Studio/Getty Images April 19, 2022 Hanneh Bareham specializes in everything related to student loans and helping you finance your next educational endeavor. She aims to help others reach their collegiate and financial goals through making student loans easier to understand. Chelsea has been with Bankrate since early 2020. She is invested in helping students navigate the high costs of college and breaking down the complexities of student loans. Bankrate logo

The Bankrate promise

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo

The Bankrate promise

Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our loans reporters and editors focus on the points consumers care about most — the different types of lending options, the best rates, the best lenders, how to pay off debt and more — so you can feel confident when investing your money. Bankrate logo

Editorial integrity

Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.

Key Principles

We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.

Editorial Independence

Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo

How we make money

You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. On Tuesday, the U.S. Department of Education announced a waiver for income-driven repayment plans that is expected to impact more than 3.6 million borrowers, 40,000 of which are anticipated to receive immediate student loan forgiveness.

Income-driven repayment has been under scrutiny

are a federal program geared toward student loan borrowers who are having trouble making their monthly payments. IDR plans base borrowers’ monthly payments off of annual income and family size, and after 20 to 25 years of qualifying payments, the remaining balance is forgiven. However, many have criticized the stringent requirements for forgiveness and the failure of servicers to properly implement the program. the results of an investigation showing that servicer mismanagement has caused potentially millions of borrowers to miss out on forgiveness through IDR. The investigation follows a report from the report showing that of the 2 million federal borrowers with at least 20 years of student loan repayment under their belts, only 32 borrowers have actually received forgiveness through IDR.

Millions of borrowers will receive credit toward income-driven repayment

The specific steps to “help restore the promise of IDR plans” and remedy what U.S. Secretary of Education Miguel Cardona referred to as “administrative failures” of the federal forgiveness program. According to the department’s press release, the changes will automatically give many borrowers progress toward IDR or Public Service Loan Forgiveness (PSLF): Several thousand borrowers with older loans are expected to receive immediate forgiveness through IDR. At least 40,000 borrowers are anticipated to receive immediate student loan forgiveness through Public Service Loan Forgiveness. More than 3.6 million borrowers are expected to receive at least three years of additional IDR credit. To accomplish this, Federal Student Aid (FSA) plans to remedy issues with forbearance steering and revise the process of tracking IDR payments.

FSA will target forbearance steering

Servicers are required to give borrowers information about all of their federal relief options if they are facing delinquency; however, FSA reviews suggest that servicers have routinely steered borrowers away from federal relief programs like IDR and instead placed them into expensive forbearance periods. Navient, one of the department’s former servicers, recently faced an for such behavior. To rectify this, FSA will conduct a one-time account adjustment for borrowers placed into long-term forbearance: Forbearance periods longer than 12 consecutive months and longer than 36 cumulative months will be counted as IDR or PSLF credit. Borrowers who were steered into shorter forbearance periods can also to file a complaint and seek an official account review. Moving forward, FSA will also exercise more oversight in ensuring that servicers do not wrongfully lead borrowers into forbearance. These actions include: Restricting servicers’ ability to enroll borrowers in forbearance via text or email. Conducting an internal review of servicers’ practices and patterns of forbearance enrollment. Working with the Consumer Financial Protection Bureau to conduct regular forbearance use audits. “This will build upon other FSA efforts to improve oversight of loan servicing activities, including stronger accountability provisions in servicing contracts, renewing partnerships with federal and state regulators and clarifying its position on federal preemption of state oversight of loan servicing,” the press release reads.

FSA will work to improve IDR payment-tracking progress

Borrowers enrolled in IDR rely on the Education Department and loan servicers to track their qualifying payments and credit toward forgiveness. However, the department’s review has found that this process has been riddled with inaccuracies due to the payment-tracking system that’s currently in place. To rectify past payment counting inaccuracies, FSA will conduct a one-time revision of all qualifying IDR payments. Any months in which payments were made on Direct Loans and FFEL loans, regardless of repayment plan, will count toward IDR relief. This includes payments made on consolidated loans prior to consolidation. Months spent in deferment before 2013 will also count toward IDR forgiveness. The department has hinted that permanent changes along these lines could be coming soon. FSA will also be holding federal servicers to a higher standard when it comes to tracking payment and forgiveness progress. One big step is a promise to automatically display borrowers’ payment counts on the Federal Student Aid website when they log in. This new feature is expected to launch in 2023.

Borrowers will likely see changes in late 2022

Borrowers who are impacted by this one-time waiver will most likely see these changes reflected in their accounts in the last quarter of 2022. For borrowers who have already made significant progress on an income-driven repayment plan, this could mean the cancellation of their remaining loan balance. Those enrolled in IDR plans don’t need to do anything to qualify for the revisions, but they should keep an eye out for any new information or account changes from their servicer. Those interested in an IDR plan can apply for one on the , although they won’t qualify for the retroactive relief measures and payment credit. SHARE: Hanneh Bareham specializes in everything related to student loans and helping you finance your next educational endeavor. She aims to help others reach their collegiate and financial goals through making student loans easier to understand. Chelsea has been with Bankrate since early 2020. She is invested in helping students navigate the high costs of college and breaking down the complexities of student loans.

Related Articles