Californians Have Until June 30 to Qualify for Faster Student Loan Forgiveness, Lower Payments

By Madz Dizon

Jun 13, 2024 08:34 AM EDT

Californians Have Until June 30 to Qualify for Faster Student Loan Forgiveness, Lower Payments
Student loan borrowers and advocates gather for the People's Rally To Cancel Student Debt During The Supreme Court Hearings On Student Debt Relief on February 28, 2023 in Washington, DC.
(Photo : Jemal Countess/Getty Images for People's Rally to Cancel Student Debt)

A peculiar opportunity to qualify for expedited student loan forgiveness, reduced monthly payments, or complete forgiveness for federal loans is available to up to 300,000 individuals in California until June 30.

Federal Student Loan Forgiveness Eligibility

The June 30 deadline set by the US Department of Education is significant as it allows borrowers to receive credit for previous years of repayment that were previously ineligible for student loan forgiveness.

The department's one-time "adjustment" will primarily benefit borrowers who obtained federal student loans before 2010, specifically Federal Family Education Loans, along with borrowers holding two other loan types.

To meet the June 30 deadline, borrowers must submit their loan consolidation applications for direct consolidation loans. 

Loans in the direct program are the only ones that qualify for loan forgiveness after 10 or 20 years of payments, based on the borrower's employment situation. Direct loans are eligible for reduced monthly payments.

While some borrowers may not find it necessary to consolidate, for many individuals, meeting the June 30 deadline could significantly impact their lives, The Sentinel reported.

To apply, individuals must create an account with the Federal Student Aid office and proceed with the consolidation application. This process typically takes around 30 minutes to complete.

Applicants must submit their consolidation applications before the June 30 deadline. The department's review process will take at least 60 days.

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California Launches $7M Network to Help Borrowers Navigate Student Loans

According to Celina Damian, the Student Loan Servicing Ombudsperson of California, Californians with loans outside of the direct program should consider applying for consolidation.

This week, California is introducing a network of 14 nonprofit organizations awarded $7 million in state grants. 

These organizations will assist California borrowers in navigating the complex landscape of student loan policies, obstacles, and deadlines.

According to the San Francisco Examiner, the Student Loan Empowerment Network is offering California borrowers personalized consultations, either in person or over the phone, to address any concerns or questions they may have regarding their student loans. 

This includes addressing specific challenges related to private student loans, subject to a distinct set of regulations.

From March 20 to May 1, Damian contacted 1,400 borrowers via phone or email. This outreach was initiated after her office emailed Californians who were likely to benefit from loan consolidation.

READ MORE: Connecticut Governor Ned Lamont Rejects $3 Million Fund for Striking Workers 

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