Do I Qualify For Student Loan Forgiveness

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About 44 million adults in the United States had federal student loans as of 2023. S. These federal loans constitute over 93% of the nation’s $1. debt from student loans totaling $766 trillion, with an average federal debt balance of $37,338 per borrower (plus an average of $54,921 in debt from private student loans)

Considering the average balances, it is not surprising that many borrowers have difficulty making their loan payments. Fortunately, in addition to the Biden Administration’s initiatives to reduce student loan debt, the federal government offers a number of programs that can offer assistance.

Public Service Loan Forgiveness (PSLF)

When employed by a qualifying public service employer for ten years and making 120 qualifying payments, qualifying federal student loans are forgiven under the PSLF.

If you are currently employed by or have previously worked for the government (federal, U S. You may qualify for the PSLF Program if you work for specific non-profit organizations or the military, state, local, or tribal government.

Visit the Department of Education’s website for the latest PSLF guidance.

How to qualify for Public Service Loan Forgiveness

Getting PSLF will require careful attention to detail. Here are some pointers for forgiving someone as easily as possible.

Make sure you qualify

Use the PSLF Help Tool to figure out your next steps. This tool is provided by the U.S. Department of Education (ED) and is free to use. Submit the forms suggested by the PSLF Help Tool to document your qualifying employment and receive credit for your monthly payments.

Make sure you have the right type of loans

Only federal Direct Loans can be forgiven through PSLF. If you have other federal student loans such as Federal Family Education Loans (FFEL) or Perkins Loans you may be able to qualify for PSLF by consolidating into a new federal Direct Consolidation Loan. To learn more about consolidation visit the Department of Education’s website .

Keep proof of your payments

The PSLF Help Tool tracks your progress to 120 qualifying payments. Check it regularly to make sure it matches your records. You do not have to make the 120 qualifying payments consecutively.

Remember: A few borrowers have expressed dissatisfaction over payment tallies provided by their servicers not matching their personal records. Contact the servicer to try to resolve this issue. If this occurs, file a complaint with the Federal Student Aid (FSA) or the Consumer Financial Protection Bureau (CFPB).

Understand the CARES Act Payment Pause

Paused payments count toward PSLF as long as you meet all other qualifications. You will get credit as though you made monthly payments. Visit ED for more information on the payment pause and PSLF .

Request credit for deferments and forbearances

Deferments prior to 2013 and extended periods of forbearance will be automatically counted as qualifying payments. To request credit for shorter forbearances—less than 12 months in a row, or under 36 months altogether—file a complaint with the FSA Ombudsman .

Note: New changes to IDR plans can affect your PSLF loan payment count. Visit Department of Education website to learn more .

Set a yearly reminder to do your paperwork

You will need to recertify your income-driven repayment plan each year. We also recommend that you recertify your employer each year —the PSLF Help Tool will guide you to the form you’ll need to complete and submit.

You can appeal if you’re denied

ED offers an online form to request your PSLF/TEPSLF denial be reconsidered . To prepare to fill out the form, gather information about the payments you believe should be counted. This includes the dates of these payments; tax information for your public service employer at that time; and digital proof of your employment and payments, such as W2 forms and letters or statements from the loan servicer.

Stay out of default

If your federal loans go into default, you will need to rehabilitate or consolidate them to get back on track to qualify for PSLF. Compare which option may be best for you .

Stay on track for loan forgiveness

These guidelines can be used by public service employers and employees to ensure that they are on track for loan forgiveness.

Most federal student loans are eligible for at least one income-driven repayment plan . Income-driven repayment (IDR) plans cap your monthly payments based on your income and family size. If your income is low enough, your payment could be as low as $0 per month.

After 20 or 25 years of repayment, the remaining amount on your loans may be forgiven, depending on the terms of the IDR plan.

One-time adjustment to fix IDR loan forgiveness

The Department of Education (ED) announced a number of updates and modifications on April 19, 2022, that will get borrowers closer to forgiveness under IDR plans. In order to count any month spent on repayment, certain deferment periods (prior to 2013), and certain forbearance periods toward loan forgiveness, ED will make a one-time adjustment. These adjustments will result in an additional year of credit toward loan forgiveness for certain borrowers. If you have loans that you have been repaying for longer than twenty or twenty-five years, you may be eligible for immediate forgiveness of those debts.

In the spring of 2023, borrowers who have made payments for IDR forgiveness for 20 or 25 years (240 or 300 months) may be eligible to have their loans forgiven. As soon as borrowers complete the necessary number of months for forgiveness, ED will continue to discharge loans. In 2024, all other borrowers will receive updates to their loan accounts.

TIP: The borrower of a student loan will not be required to pay any fees in order to be eligible for loan forgiveness. It’s a scam if someone demands payment from you in order to forgive your debt. What is considered part of the 20 or 25 years needed for IDR pardon?

Any months where the repayment status is delayed (irrespective of the loan type, repayment plan, or amount of payments made)
36 months total of cumulative forbearance or 12 consecutive months of forbearance
Months spent in economic hardship or military deferments after 2013.
Months in deferment prior to 2013 (except in-school deferment).
Any time in repayment prior to consolidation on consolidated loans.

What loans qualify for the IDR one-time adjustment?

The one-time IDR adjustment is only applicable to federal student loans that are overseen by the Department of Education (ED). The one-time account adjustment will not require borrowers with Direct Loans or federally managed FFELP loans to take any action in order to be eligible. Even in cases where the loans are not presently subject to an IDR plan, automatic forgiveness will be granted to any borrower with ED-held loans who has accrued at least 20 or 25 years of repayment history.

Borrowers with FFELP loans held by commercial lenders or Perkins loans not held by ED can benefit if they consolidate into Direct Loans. Borrowers must consolidate by the end of 2023, in order to benefit from the one-time IDR account adjustment. Borrowers can apply for a Direct Consolidation Loan online or with a paper form .

TIP: Not sure what type of loan you have? Log into StudentAid.gov using your FSA ID and select “My Aid” under your name. That page will display information about your federal loan amounts, including whether your loans are Direct or commercial FFELP. For more information, contact your student loan servicer.

Learn more information about the IDR fixes on the Department of Education’s website .

How to enroll in an income-driven repayment plan

If you have a federal student loan, you may be able to enroll in an IDR plan online. The Department of Education’s (ED) online IDR plan enrollment website will tell you what types of loans you have. It is the best place to start if you need to enroll in income-driven repayment plan.

Repayment periods for IDR plans

Plan	Repayment term and forgiveness
Revised Pay As You Earn (REPAYE)	20 years if all loans youre repaying under the plan were received for undergraduate study. The remaining balance will be forgiven after 20 years. 25 years if any loans youre repaying under the plan were received for graduate or professional study. The remaining balance will be forgiven after 25 years.
Pay As You Earn (PAYE)	20 years. The remaining balance after 20 years will be forgiven.
Income-Based Repayment (IBR)	20 years if youre a new borrower on or after July 1, 2014. The remaining balance will be forgiven after 20 years. 25 years if youre not a new borrower on or after July 1, 2014. The remaining balance will be forgiven after 25 years.
Income-Contingent Repayment (ICR)	25 years. The remaining balance will be forgiven after 25 years.

FAQ

How do I know if I qualify for student loan forgiveness?

Even in cases where the loans are not presently subject to an IDR plan, automatic forgiveness will be granted to any borrower with ED-held loans who has accrued at least 20 or 25 years of repayment delay.

Which student loans are not eligible for forgiveness?

If you have private loans, you are not eligible for federal student loan forgiveness programs, but there are alternative ways to manage your debt.

Is it too late to apply for student loan forgiveness?

Student Loan Forgiveness Considerations As Student Loan Payments Resume. The Education Department states that borrowers must use the federal Direct consolidation program to combine their loans in order to be eligible for student loan forgiveness under the IDR Account Adjustment by December 31, 2023.

Can I get student loan forgiveness if I haven t graduated yet?

The Department of Education offers several student loan forgiveness programs. Even if you did not graduate, you might still be eligible for these programs. The Public Service Loan Forgiveness program, or PSLF for short, is the most well-known and well-liked forgiveness program.

Read More :

https://studentaid.gov/manage-loans/forgiveness-cancellation
https://www.consumerfinance.gov/paying-for-college/student-loan-forgiveness/