How will the loan forgiveness benefit be applied to my outstanding Direct Loan balance?

First, the discharge will be applied to all fees (NSF or late payment) across unsubsidized loans first, then to subsidized loans and lastly to outstanding fees on eligible consolidation loans.

After the forgiveness amount is applied to all fees, the remaining forgiveness amount will be applied to all outstanding interest on unsubsidized loans then subsidized loans, then to all outstanding interest on eligible consolidation loans.

Lastly, the remaining forgiveness amount will be applied to unsubsidized loan principal balances, to subsidized principal loan balances and to the outstanding principal on eligible consolidation loans.