Student Loan Forgiveness: 2023 Dates To Know Now
The Biden administration has started rolling out a series of programs and initiatives to lighten the burden of student loans and make the repayment process more equitable and manageable. For those who hold student loans and want to take advantage of all the benefits coming their way, there are some key dates you might want to be aware of coming up in 2023. With the multitude of new initiatives launching simultaneously, it can be overwhelming to keep track of looming deadlines and where action is required. Here’s a roundup of important dates you will want to add to your calendar in order to make the most of student loan repayments and new programs.
Stimulus 2023: Updates To Know Now
Read: 3 Signs You’re Serious About Raising Your Credit Score
Jan. 1, 2023
Borrowers are likely dreading Jan. 1, 2023. On the first of the month, student loan repayments will resume after a long pause. In light of this impending repayment date, it is important for borrowers to get their applications in as early as possible so that they can be processed and their accounts updated before payment resumes.
Take Our Poll: Do You Think Bankruptcy Is an Acceptable Way To Escape Student Loan Debt?
May 1, 2023
The new IDR Account Adjustment will begin in November 2022 with some people seeing their debts discharged or significantly paid down around this time or later in July 2023. No additional action is necessary for this initiative for those who already have federal student loans as this program will be automatically occurring throughout the fall. However, borrowers with FFEL and commercially-held student loans may require direct loan consolidation in order to benefit from the relief. That must be done by May 1, 2023.
For those who aren’t familiar, this is another student loan relief initiative Biden announced last spring that will launch Income-Driven Repayment (IDR) programs. Under this plan, the Education Department will be able to offer retroactive credit to someone’s student loan account toward a borrower’s repayment term. The Department stated that over 3.6 million borrowers will obtain at least three years of repayment credit.
“Any borrower with loans that have accumulated time in repayment of at least 20 or 25 years will see automatic forgiveness, even if you are not currently on an IDR plan,” according to the department.
Stimulus Checks: Mark These Dates on Your Calendar Now
June 30, 2023
Student loan debt relief has been on pause and under review of the Supreme Court since Nov. 2022. If the program is approved or a decision isn’t made by the Supreme Court before June 30, 2023, then payments will resume to those who are entitled to them 60 days after that.
July 1, 2023
Beyond the temporary initiatives, the Biden administration is also implementing some new regulations for federal student loans to provide more lasting changes. These new plans include updating Public Service Loan Forgiveness (PSLF) regulations to codify the Limited PSLF Waiver. The PSLF program allows borrowers to obtain credit for payments they have made toward their loan that would not normally qualify for PSLF.
There is also a discussion for the enactment of a more affordable IDR plan. In a statement by the Education Department in August, the department is proposing a new income-driven repayment plan that would decrease the monthly payments for lower- and middle-income borrowers. The new plan would decrease monthly payments on undergraduate loans by 50%. The proposed new plan would also help protect loans from accruing interest by reducing interest rates.
Although these regulations have yet to be finalized, the soonest they might be enacted is July 1, 2023.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: Student Loan Forgiveness: 2023 Dates To Know Now
