The Biden administration created the IDR Account Adjustment as a “fix” for persistent issues with income-driven repayment arrangements. Under these plans, borrowers can choose how much they want to pay back on their federal student loans depending on their family size and income; after 20 or 25 years of repayment, the remaining sum can be forgiven. However, in the past, a lot of borrowers were misled into paying for expensive forbearances (which don’t count toward loan forgiveness), and inadequate documentation made it impossible for some borrowers to receive credit for the time they spent repaying their loans.

Many previous payback periods under any plan (including non-IDR plans), along with some deferment and forbearance periods, can count toward IDR loan forgiveness under the account adjustment, just as if the borrower had been in an IDR plan. This may hasten the process of forgiving IDRs. The remaining amount would be discharged for those who obtain enough credit to reach the 20- or 25-year mark.

Since last July, the Education Department has conducted the adjustment every two months. Over 900,000 debtors have benefited from loan forgiveness thus far, with the most recent round of approvals, which totaled $5 billion, revealed last month.

However, the short-term program is coming to a conclusion in a few more months. According to revised published guidelines, “the U.S. Department of Education (ED) currently expects that the payment count adjustment will be completed by July 1, 2024.” Accordingly, the department will rerun the adjustment in March and May before completing its full implementation in July.