Student loan forgiveness: Some may qualify but need to take action by April 30

FILE - U.S. President Joe Biden is joined by Education Secretary Miguel Cardona (L) as he announces new actions to protect borrowers after the Supreme Court struck down his student loan forgiveness plan in the Roosevelt Room at the White House on Jun

Eligible borrowers who consolidate their student loans could qualify for some debt forgiveness, or receive credit for loan forgiveness, as part of a one-time adjustment this summer from the U.S. Department of Education.

More than 3.6 million borrowers with Direct Loans will receive at least three years of credit toward loan forgiveness, and many will see their loans forgiven automatically.

The move is part of the Biden administration's push to provide student debt relief after his one-time student loan cancellation was blocked by the U.S. Supreme Court. 

The Education Department said the adjustment, which is currently underway and will continue through the summer, is intended "to more accurately reflect borrowers’ payment counts." 

But some borrowers may need to submit a loan consolidation application to qualify.

Here’s what to know:

Why is the Education Department making one-time adjustments? 

Student loan borrowers who are on an income-driven repayment plan or are working toward Public Service Loan Forgiveness can have their loans forgiven after making the required number of payments. For borrowers on income-driven repayment plans, that's after 20 or 25 years.

In the past, there were "a variety of reasons why some months may not have been credited toward loan forgiveness," the Education Department said.

For example, there may have been months when the borrower was on a payment plan that wasn’t eligible. 

"With this payment count adjustment, we will change whether certain payments or months are credited toward your loan forgiveness," the Education Department said. 

Depending on the status of loan repayment, officials said the change will result in one of the following for eligible borrowers:

  • Borrowers still have more time left until the end of their repayment period. They will be closer to the end of their repayment period and closer to forgiveness.
  • Borrowers reach the end of their repayment period. They will automatically receive loan forgiveness.
  • Borrowers have more than the number of months required in their repayment period. In most cases, they'll receive a refund for any overpayment.

RELATED: Student loan forgiveness: What to know about Biden’s latest cancellation proposal

April 30: Key deadline approaching for forgiveness opportunity

Students from George Washington U

FILE - Students from George Washington University wear their graduation gowns outside of the White House in Washington, DC, on May 18, 2022. (Photo by STEFANI REYNOLDS/AFP via Getty Images)

The Education Department said it expects that the payment count adjustment will be completed by July 1, 2024. 

Any adjustments will be automatically applied to all Direct Loans, which include Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans. 

They will also be applied to Federal Family Education Loan (FFEL) Program loans that are currently managed by the Education Department, which includes Direct Consolidation Loans that repaid a privately held Perkins or FFEL Program loan and that are disbursed before the adjustment occurs.

But first, the Education Department said borrowers with Direct Loans and FFEL Program loans should consolidate them to get the most credit toward cancellation. 

Those who wish to consolidate their loans in order to get the benefit of the adjustment must submit a loan consolidation application by April 30, 2024.

"Please note that submitting a consolidation application alone does not guarantee any benefits under the payment count adjustment. In general, it takes at least 60 days to process a Direct Consolidation Loan application and to disburse the new loan," the department said on its website.

This story was reported from Cincinnati.