The Biden administration is attempting to reduce or eliminate student loan balances for borrowers again, according to a report from The Wall Street Journal. The president and founder of The Institute of Student Loan Advisors Betsy Mayotte joins Yahoo Finance's Wealth! to discuss student loan relief measures.

Mayotte explains the "one-time account adjustment," which would give borrowers an opportunity to consolidate their current loans "to get the most benefits they can." With a deadline of April 30th, this option has a loan forgiveness benefit. She explains that every period an individual has been under repayment, borrowers will receive credit toward the "forgiveness component" under Income-Driven Repayment (IDR) or SAVE plans.

Despite the uncertainty surrounding the potential legislative changes, Mayotte believes individuals who qualify for relief will not be affected even if Biden's proposal is ultimately struck down. She emphasizes that the process is already "halfway to the finish line," encouraging borrowers to take advantage of the available options while they can.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

Editor's note: This article was written by Angel Smith

Video Transcript

- The Biden administration proposing to reduce or eliminate student loan balances for millions of borrowers, according to the Wall Street Journal. The regulations set to be issued as soon as next week. This comes after the Supreme Court overturned the administration's first debt cancelation plan last year.

Well, if this latest attempt doesn't pan out, again, what can you do to lower your student loan balance? For more on this, we've got Betsy Mayotte, who is the Institute of Student Loan Advisors founder and president here with us. Betsy, thanks so much for taking the time here with us.

First and foremost, there's a deadline to this, and the April 30 deadline that a lot of people might have been getting notifications about already. What do they need to know about that deadline?

BETSY MAYOTTE: The deadline has to do with borrowers that might benefit by consolidating their federal student loans to take advantage of something called the one-time account adjustment. Now, to be clear, most borrowers aren't going to have to do anything to get this adjustment, but borrowers who have older fell, or Perkins loans, or maybe they have loans that have been in repayment for different periods of time, they are going to want to consolidate by April 30 to get the most benefits they can out of this one-time adjustment.

- How do people apply for that? Do they need to apply for that?

BETSY MAYOTTE: They don't have to apply for the adjustment. If they have federal direct loans, that adjustment is just going to happen. But if they do need to consolidate, they can do that online, super easy, at studentaid.gov, which is the Department of Ed's website.

- And then loan forgiveness, I mean, this has been what so many borrowers have been waiting for, trying to make sure that they are qualifying for, as well. What are the prerequisites for those who do qualify versus don't qualify?

BETSY MAYOTTE: Yeah. So what the one-time account adjustment does is it gives borrowers credit for every period that they've been in repayment towards the forgiveness component that exists under the income-driven repayment plan, such as the SAVE plan that we've heard so much about.

So normally, to get forgiveness under those plans, you have to be on the plan for either 20 or 25 years. But this one-time account adjustment will give you credit for all periods you've already been in repayment, even if you weren't on one of those plans.

- We know that this has been on the docket for the Biden administration multiple times at this juncture. What's the likelihood that we see a different result this time?

BETSY MAYOTTE: Well, this particular one-time account adjustment is already rolling. I think at this point, they plan to have all the accounts adjusted by the fall. I am cautiously optimistic that this particular waiver is going to be left alone.

- Interesting. Why is that?

BETSY MAYOTTE: Because it hasn't been killed yet. And we're already-- we're sort of already halfway to the finish line. It's much harder to unwrap accounts that have already been adjusted and people that have already had forgiveness than it is to stop something before it started.

- Certainly. OK, so everyone is going to need to be on an income-driven plan to accrue the rest of the payments needed for forgiveness, right? And how do they go about setting that up correctly?

BETSY MAYOTTE: Most borrowers, again, just need to go to studentaid.gov. There's a couple of great tools there. One, a loan simulator tool, which is a calculator that will tell you what your payment will be on each plan and whether or not you'd end up with some forgiveness and how much it's going to cost you over time. And then you can also apply for the income-driven plans right through that website, regardless of who your loan servicer is.

- Are people able to-- if they've been paying for 20, 25 years, two decades, we're talking, of payments, are they going to be able to apply for, I don't know, some type of refund or anything?

BETSY MAYOTTE: If it-- after the one-time account adjustment is done, if it turns out that the borrower made more than the 20 or 25 years worth of payments, and they haven't consolidated recently, then they will get an automatic refund for those extra payments.

- Really interesting. Betsy, thank you so much for giving us the tips that we all need to navigate some of these student loan payments out here. Betsy Mayotte, who is the Institute of Student Loan Advisors founder and president. Thank you so much.

BETSY MAYOTTE: My pleasure.