Student Loan Consolidation Deadline: In the final hours of April, those seeking relief from student loan debt face a significant deadline.
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A one-time adjustment by the U.S. Department of Education may result in full or partial cancellation of federal student loans.
To take advantage of this opportunity, action must be taken before April 30, 2024.
Despite being initially blocked by the U.S. Supreme Court last year, President Joe Biden’s student loan forgiveness plan continues to be ironed out.
A key deadline is approaching fast for an opportunity for a student loan cancellation. https://t.co/npJWnrsfkR
— NBC 7 San Diego (@nbcsandiego) April 29, 2024
By resolving income-driven repayment (IDR) forgiveness and Public Service Loan Forgiveness (PSLF), his administration announced last January that 73,600 borrowers had their loans canceled for $4.9 billion.
If borrowers meet the April loan consolidation deadline, which was extended from Dec. 31, they may qualify for loan forgiveness.
According to the Department of Education, consolidating loans does not guarantee forgiveness, and the process takes at least 60 days.
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How much will my interest rate increase if I consolidate my student loans?
The new consolidated interest rate does not affect low-interest federal student loans.
A weighted average of the consolidated loans determines the interest rate of the new Direct Consolidation Loan.
When consolidating FFELP loans, borrowers may lose some benefits, as the lender’s discounts will disappear.
In order to keep the current discount, borrowers must exclude FFELP loans. To determine whether consolidating is right for them, borrowers must determine whether they qualify for forgiveness.
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What is the best way to consolidate student loans?
Over 30 million individuals are expected to benefit from the Biden administration’s initiative to alleviate student debt burdens.
This process begins with consolidation, which can pave the way for eligibility and make more payments count toward cancellation.
The new weighted average consolidation rules for student loans are completely different from those before or during the pandemic. These new rules are in effect as of July 2024. Read what these rules mean and whether you should consolidate: https://t.co/uP7mTRi1Zm
— Travis Hornsby, CFA, CFP® (@StudentLoanTrav) April 29, 2024
You can benefit from protections such as Public Service Loan Forgiveness (PSLF) when you consolidate federal student loans into a Federal Direct Consolidation Loan.
While consolidation does not lower interest rates, it provides stability by locking in a fixed rate, ensuring consistent payments.
Millions of students are expected to have their debts canceled, while others will be able to eliminate accrued interest.
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Is there a penalty if you miss the deadline?
If you consolidate your loans after the April 30 deadline, you can still get credit for past direct loan payments, but your payment count will be based on a weighted average.
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