As the deadline to consolidate FFEL loans to Direct loans in order to receive PSLF forgiveness (OCT 31, 2022), we recommend that borrowers use Nelnet to consolidate rather than Aidvantage or Mohela as Nelnet is currently processing these quicker.  The account would then be transferred to Mohela, as the PSLF servicer, once the PSLF certification is filed.

It’s also quicker to do so online if possible.

The language used by the Department of Education makes it appear as though you must have a Direct loan to be considered for the limited PSLF waiver, not that an application has been filed.

While the current pause for federal student loan repayments is expected to end August 31, 2022, it is widely thought that this date may actually be extended again until the end of the year (which is past the mid-term elections).

The Department of Education furthered this thought process by telling its servicers NOT to send bills saying student loans are coming due in September.

It’s now August 19.  Less than two weeks left to the end of the month.  In the past, decisions to extend the payment pause were made approximately 40 days before the expiration of the deadline.

I just finished reading Eleni Schirmer’s article in the New Yorker today about aging student loan debtors.  This is something I regularly see as well in our law practice.  Folks with crazy high balances nearing or actually in retirement, with absolutely no way to even think of paying the off the student loans.  Loans that were once $20k – $30k which have ballooned to sometimes hundreds of thousands of dollars.

I was a bit disappointed that the article didn’t allude to some of the recent efforts by the Department of Education to fix some of the long standing problems facing student loan borrowers.  We have been using these enhancements to existing programs to obtain much needed relief for our clients.  Things like the PSLF Waiver and the IDR Waiver are much bigger than many thought, and can be used to circumvent one of the largest problems plaguing our federal system where the faulty relief methods mentioned in Ms. Schirmer’s article previously didn’t work.

No mention was made of the Total and Permanent Disability program also.  I have just written about this process in a chapter to be included in a book Eldercare 101 that will be out in a few months.  We love this program and our prior work with the ADA and employment law, as well as our retention of physicians with an occupational medicine specialty, have helped us to obtain tax free 100% discharges of student loan debt in a matter of months.

We are hearing from folks that they believe there is a 7/28 deadline to file a BDTR application for auto approval.

The case Preliminary Settlement Approval hearing in Sweet v Cardona is 7/28/22.  It is NOT a deadline, but we should know more after that hearing.  Hopefully, they will set  FINAL Settlement Approval hearing date for this fall sometime.

However, any new applications submitted after June 22, 2022 will be evaluated on their merits — not the same as auto approval.  If you ran into the same sorts of issues that have been investigated in the past for a particular school, I believe that ED has telegraphed its intention to include that within its guidelines for approval.  The timeframe for forgiveness may not be all that different either as it will take up to a year for the auto approvals and any new application will have to be reviewed within 36 months.  It’s highly unlikely that the Biden administration will leave any undecided strays after the 2024 election – so you’re likely looking at up to 2.5 yrs of waiting during which the payments would remain on forbearance.  It’s likely most of the new applications would be reviewed within 18 months to allow adequate time for the actual forgiveness to occur before the 2024 election.  All this is a guess of course.