Some student-loan borrowers will lose out on debt relief if they don't take action by the end of the year

• The Education Department is getting relief to some student-loan borrowers through a one-time account adjustment.
• Borrowers with privately-held FFEL loans need to consolidate into direct loans before the end of the year.

A key deadline for some student-loan borrowers to take advantage of relief is fast approaching.

Over the summer, President Joe Biden's Education Department announced a one-time account adjustment for borrowers on income-driven repayment plans and Public Service Loan Forgiveness. Following past issues tracking payments for borrowers in targeted relief programs, the adjustment allows borrowers another shot to have their accounts evaluated, and updated correctly, to bring them closer to debt relief.

One group eligible for those relief programs is borrowers who hold Federal Family Education Loans. While those with FFEL loans held by the Education Department do not need to take any action to benefit from the adjustment, FFEL borrowers with loans held by a private lender must apply for consolidation "no later than the end of 2023" to benefit from the account adjustment, per the department's guidance.

Already, the department has announced that over 800,000 borrowers have gotten their loans wiped out through the one-time account adjustment, and it will continue to evaluate borrowers' accounts every two months to determine who else qualifies for the relief.

Meanwhile, failure for borrowers with privately-held FFEL loans to consolidate could miss out on the benefits the adjustment offers. Those borrowers can submit an application at this link to begin the consolidation process.

This adjustment is separate from Biden's new SAVE income-driven repayment plan, intended to lower monthly payments for many borrowers. The Education Department announced the new plan prior to the federal student-loan payment resumption in February, but since then, many borrowers have experienced challenges reaping the benefits of SAVE due to servicer errors.

For example, a recent Federal Student Aid memo found 78,000 borrowers faced errors when converting to the SAVE plan, resulting in inaccurate monthly payments. One borrower previously told Insider that prior to enrolling in SAVE, she expected to see a $47 monthly payment — but she was later billed $175.

The Education Department instructed servicers to place all impacted borrowers on administrative forbearance without interest accrual until the issues are resolved. In the meantime, borrowers can consider the one-time account adjustments for relief, along with more targeted actions through Public Service Loan Forgiveness and the borrower defense to repayment for defrauded borrowers.

Additionally, the department is in the process of implementing more relief using the Higher Education Act of 1965 after the Supreme Court struck down Biden's first plan for broad loan forgiveness in June. That process will take time, with implementation expected in July 2025 at the latest.