When Will Income-Driven Repayment Adjustments Be Made?

The Income-Driven Repayment (IDR) account adjustment is a significant initiative designed to address historical administrative issues within the federal student loan system. Its primary purpose is to ensure borrowers receive accurate credit towards loan forgiveness under various IDR plans and Public Service Loan Forgiveness (PSLF). This adjustment aims to rectify past inconsistencies in payment tracking and program management, providing a more equitable path to forgiveness for millions of borrowers.

Eligibility for the Adjustment

The IDR account adjustment applies to various federal student loan types. All Direct Loans, including Parent PLUS loans, and Federal Family Education Loan (FFEL) Program loans held by the Department of Education are automatically eligible. This ensures a significant portion of borrowers will have their accounts reviewed without immediate steps.

For certain loan types, consolidation into a Direct Consolidation Loan was a prerequisite to benefit from the adjustment. This includes commercially held FFEL Program loans, Perkins Loans held by a school, and Health Education Assistance Loans (HEAL). The deadline for consolidating these loans to receive the full benefits of the IDR adjustment was June 30, 2024. Consolidating before this date ensured past periods of repayment, forbearance, or deferment on original loans could be credited toward the IDR forgiveness timeline.

The adjustment provides credit for months spent in repayment since July 1, 1994, regardless of payment amount or plan. Certain periods of forbearance also count towards forgiveness: 12 or more consecutive months, or 36 or more cumulative months. Economic hardship and military deferments after 2013, and any deferment (except in-school) prior to 2013, also contribute to the payment count. This approach recognizes time in various statuses, moving many borrowers closer to forgiveness. Conversely, time in default, in-school deferments, most grace periods, and months where loans were subject to a court judgment are generally not counted.

Anticipated Timing of Adjustments

The IDR adjustments have been an ongoing process, with initial forgiveness waves commencing in spring 2023. These early adjustments primarily targeted borrowers who had accumulated enough qualifying months for immediate forgiveness under IDR or Public Service Loan Forgiveness (PSLF). The Department of Education prioritized these accounts to provide relief.

Following initial waves, the Department of Education continued to apply adjustments in phases. The full payment count adjustment for all eligible Direct Loans and federally held FFEL Program loans was expected by July 1, 2024, or September 1, 2024. Borrowers whose loans reached the required 20 or 25 years of repayment (240 or 300 months) continued to see automatic forgiveness.

While many adjustments have been applied, the process for all borrowers to see updated payment counts was largely completed by January 2025. Borrowers whose loans required consolidation to benefit from the adjustment needed to complete that process by the June 30, 2024, deadline. For certain unique circumstances, such as joint consolidation loans, borrowers have an extended period until June 30, 2025, to separate and consolidate their loans to receive the IDR payment count adjustment.

Monitoring Account Changes

Borrowers can track the progress of their IDR adjustment and verify its application through their federal student aid account. Logging into StudentAid.gov allows access to a personalized dashboard displaying loan information. This platform provides an overview of loan details and, for many, an updated payment count reflecting the IDR adjustment.

A dedicated IDR payment count tracker became available on StudentAid.gov by January 2025, offering a more detailed view of qualifying payments. This tracker displays total payments made, remaining payments required for forgiveness, and a projected forgiveness date based on the borrower’s repayment plan. This tool provides increased transparency regarding a borrower’s progress toward loan forgiveness.

Loan servicers also play a role in communicating changes related to the IDR adjustment. Servicers are responsible for implementing adjustments directed by the Department of Education and for notifying borrowers of significant updates to their accounts, including forgiveness. Maintaining up-to-date contact information with both StudentAid.gov and the loan servicer is recommended to ensure receipt of all pertinent communications.

Post-Adjustment Loan Status

After the IDR adjustment is applied, several outcomes are possible for borrowers, depending on their individual loan history. For those who meet forgiveness criteria, their loan balance will be reduced to zero. The Department of Education typically notifies these borrowers via email before forgiveness is processed, and their loan servicer provides a confirmation once the balance is officially cleared.

Many borrowers who do not reach immediate forgiveness will still receive additional payment credit, moving them significantly closer to their forgiveness timeline. This means their accumulated payment counts will increase, reducing the remaining time until they qualify for IDR forgiveness. To continue progressing towards forgiveness after the adjustment, borrowers must enroll in an eligible Income-Driven Repayment plan.

In certain cases, borrowers who accumulated more than the required 20 or 25 years of payments for IDR forgiveness may be eligible for a refund of their overpayments. These refunds are generally for payments made beyond the point at which they reached the necessary payment count for forgiveness. While loan forgiveness under the IDR adjustment is federally tax-exempt through December 31, 2025, borrowers should be aware that, absent further legislative action, forgiven amounts may become taxable income at the federal level starting in 2026. State tax treatment of forgiven student loan debt can vary, so consulting with a tax professional is advisable for specific guidance.