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It can be extremely stressful to manage large student loan debt, particularly if you’re having trouble making your payments.
Fortunately, there are programs like Public Service Loan Forgiveness (PSLF) and Income-Driven Repayment (IDR) that may help reduce the amount of money you have to repay on your federal student loans.
Understanding that a student loan refinance may allow you to lower your monthly payment is crucial when attempting to figure out how to get rid of student loans. Alternatively, you might be able to use deferment or forbearance to temporarily suspend your federal loan payments.
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While it may sound too good to be true, there are actually ways to receive student loan forgiveness through cost-free government programs.
The options listed below are exclusive to borrowers who have federal student loans. While income-driven repayment plans are available to the majority of borrowers, certain programs have extremely specific requirements that make them difficult to qualify for.
The following details current student loan forgiveness programs, for which borrowers must meet certain qualifications. If successful, all of the borrowers debt is forgiven.
If you have private loans, you are not eligible for federal student loan forgiveness programs, but there are alternative ways to manage your debt.
Student loan forgiveness programs
1. Income-driven repayment forgiveness. The federal government provides four primary income-driven repayment plans that let you set a monthly loan payment cap based on a portion of your income. Your remaining loan balance will be forgiven after 20 or 25 years, depending on the plan, if you are enrolled in one of these. Those with high loan balances in comparison to their income are best served by these plans. As part of the March 2021 American Rescue Plan, this forgiveness was made tax-free retroactive to December 2020 through the end of 2025. But most borrowers won’t be eligible for income-driven repayment forgiveness until the early 2030s.
2. Public Service Loan Forgiveness. Federal student loan holders who work for the government or meet certain nonprofit requirements may be eligible for Public Service Loan Forgiveness. Once qualified borrowers have made 120 qualifying loan payments, their remaining loan balance may be forgiven tax-free.
3. Teacher Loan Forgiveness. After working for five years in a row, full-time teachers in low-income public elementary or secondary schools may be eligible for Teacher Loan Forgiveness. Up to $17,500 in direct federal student loan forgiveness is available to them. To qualify, teachers must have taken out loans after Oct. 1, 1998.
4. Student loan forgiveness for nurses. %20Nurses%20carrying%20student%20debt%20have%20advanced%20options%20for%20student%20loan%20forgiveness,%20including%20Perkins%20loan%20cancellation,%20Public%20Service%20Loan%20Forgiveness, and the NURSE%20Corps%20Loan%20Repayment%20Program, which pays up to 85% of qualified nurses 8% to 99% of unpaid college debt Given that the NURSE Corps program is extremely competitive and that few borrowers have Perkins loans, public service loan forgiveness might be the most viable option for the majority of nurses.
Other student loan forgiveness programs
You might be eligible for a few more specialized federal or state programs that forgive your student loans or help with payments. Your profession and place of employment determine your eligibility for these programs.
- State-sponsored repayment assistance programs. In certain states, professionals with licenses to practice law, medicine, nursing, and teaching may be eligible to participate in debt repayment programs. For instance, the Mississippi Teacher Loan Repayment Program reimburses teachers with a specific teaching license up to $3,000 annually for a maximum of four years on their undergraduate education loans for each year they work full-time in a given location or subject area. To learn if you are eligible for a program, get in touch with the higher education department in your state.
- Military student loan forgiveness and assistance. Members of the National Guard, Coast Guard, Army, Navy, and Air Force may be eligible for separate loan forgiveness programs. For instance, the Student Loan Repayment Program allows National Guard members who meet certain requirements to receive up to $50,000 toward the repayment of federal student loans.
- Additional student loan repayment assistance programs (LRAPs): Public service professions may be eligible for additional national or organizational student loan repayment assistance programs. For instance, the National Institutes of Health provides debt relief of up to $35,000 per year to medical professionals who are selected by the institutes to carry out research. Lawyers can find a list of state LRAPs from the American Bar Association.
Student loan cancellation programs
- Perkins loan cancellation. If borrowers with federal Perkins loans work in a public service position for five years, they may be eligible to have up to 10% of their loans canceled. Approved borrowers frequently experience an incremental discharge of a portion of their loans for each year that they work. Teachers who work full-time in low-income public schools or who instruct in subjects that meet the requirements—such as special education, math, science, or foreign languages—are eligible for the Perkins Loan Teacher Benefit.
Student loan discharge programs
- Closed school discharge. You may qualify for loan discharge if your school closes. You had to be enrolled at the time of closure or have left within 120 days without graduating. To begin the application process if you are eligible, get in touch with your loan servicer. While your application is being processed, you will need to keep up with your loan payments. If your application is accepted, you won’t have to make loan payments going forward, and you might even get reimbursed for some or all of your previous loan payments.
- Borrower defense to repayment discharge. Borrowers defrauded by their colleges may qualify for debt relief. It is necessary for you to submit a borrower defense to repayment claim to the U S. Department of Education. At the discretion of the Education Department, if your school engaged in obvious, widespread fraud or misrepresentation that impacted a large number of borrowers, you may be eligible to have your loans automatically discharged.
- Total and permanent disability discharge. You might be eligible to have the remaining balance on your student loans forgiven if your physical or mental disability prevents you from working for an extended period of time. You must present proof of your disability in order to be qualified for a total and permanent disability discharge. The government may keep an eye on your finances and disability for three years after your loans are discharged. Your loans might be reinstated if you fail to meet the requirements during the monitoring period. Details on the application process are available at disabilitydischarge. com.
- Total and permanent disability discharge for veterans. Veterans who are completely and irreversibly disabled will not be required to pay back their student loans. Unless they decline because they might be liable for state taxes (there is no federal tax liability for veteran loan forgiveness), the process will be automatic.
- Discharge due to death. Your federal loans will be canceled if you pass away as soon as your loan servicer receives a death certificate. If either you or the parent who holds the loan dies, your parent’s PLUS loans, which were used to fund your education, will be canceled.
The caveats
Although the Department of Education offers free legitimate federal forgiveness, cancellation, and discharge programs, there are additional expenses to take into account.
- Beware of scams. Although many so-called debt relief companies charge high upfront fees to already struggling borrowers, they rarely deliver on their promises of debt relief. The aforementioned legal government programs are the only avenue for debt discharge, and applying to them is free of charge.
- Forgiveness isn’t an option for defaulted loans. Before you can apply for forgiveness programs, you must use consolidation or rehabilitation to bring your federal student loans into good standing. In extreme circumstances, bankruptcy or student loan settlement may be able to lower your debt if your loans are not eligible for forgiveness. Defaulted federal loans are eligible for discharge programs.
FAQ
How do I get my student loan debt written off?
After you’ve made 120 qualifying payments on your Direct Loans, you may be eligible for forgiveness of the whole balance if you work full-time for the government or a nonprofit organization. e. , 10 years of payments. You must repay your federal student loans under an IDR plan in order to be eligible for PSLF benefits.
Can you get student debt forgiven?
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.
How to get 100% student loan forgiveness?
Closed school discharge: Should your school close while you are still enrolled or shortly after you graduate, you may be eligible for a federal student loan discharge of up to $10,000. Direct loans, FFEL Program loans, and Perkins loans are examples of qualifying loans. Cancellation amount: Up to 100%.
Read More :
https://studentaid.gov/manage-loans/forgiveness-cancellation
https://www.nerdwallet.com/article/loans/student-loans/student-loan-forgiveness