Goodnews to students! There is a program called student loan forgiveness! Do you want to know how to go about it? Relax, because this post has simplified those steps you need to take to get your student loan forgiven, in addition to the forgiveness programs available.
Are we teaching you how to avoid your responsibilities? Not at all! We are just offering some help to students who have encountered financial difficulties and are unable to repay their student loans. We are saving them some headaches. Don’t we deserve some applause?
Besides, student loan forgiveness is not an evasion of the law. Students who have been and are still stressed financially will understand better.
Here are our highlights, We’ve got you covered!
- What is loan forgiveness?
- Does student loans forgiveness cover all student loans?
- How do I get public student loan forgiveness?
- Student loans Forgiveness Programs
- By Career and Profession
- Public Service Loan Forgiveness Program (PSLF)
- Teacher Loan Forgiveness Program
- Loan Forgiveness for Nurses
- Loan Forgiveness for Doctors
- Loan Forgiveness for Lawyers
- Loan Forgiveness for Military
- By Timeframe
- Income-Based Repayment Plans
- By Student Discharge
- Closed school discharge
- Borrower defense to repayment discharge
- Total and permanent disability
- Federal Perkins Loan Cancellation
- Tips on student loan forgiveness
- What is the Loan Forgiveness Application Process?
- Student Loan Forgiveness FAQs
What is loan forgiveness?
Student loan forgiveness basically has to do with leaving the amount left on the student loan of people who undertake qualified jobs, such as teaching in a high-need area. However, these people must have repaid the loan for a specific length of time.
Loan discharge is rare but can be granted to borrowers who can’t repay the loan for a variety of reasons such as death, disability, fraud, identity theft, and in very scarce circumstances, bankruptcy or closure of the school where the loan was taken.
Does student loans forgiveness cover all student loans?
Yes, loan forgiveness covers all federal loans. But, here is an exception;
Loan Forgiveness is not for private loans. Only federal loans can be forgiven
How Do I Get Public Student Loan Forgiveness?
To get a student loan forgiveness, you have to follow either of the three paths.
The first is based on the type of career you choose – Your profession.
The second is based on you how many years you make on-time payments while enrolled in a qualifying repayment plan.
The last one requires a set of extraordinary circumstances that rarely come into play, but nonetheless could result in loan forgiveness. That is, student discharge.
The first two are available for federal student loans only and the last one is achievable for federal or private student loans.
Student loans Forgiveness Programs
There are numerous students loan repayment programs. I will explain the major ones in details under each classification.
By Career and Profession
Public Service Loan Forgiveness Program (PSLF)
This form of loan repayment program is used to encourage college graduates to take full-time public service jobs in exchange for having a portion of their student loans forgiven.
This forgiveness is only available for direct federal student loans, direct plus loans, and direct consolidation loans. Private student loans are not eligible to receive the Public Service Loan Forgiveness.
To be able to receive loan forgiveness, you must be a full-time employee (at least 30 hours per week) in a public service job and make 10 years of on-time monthly payments (120) after consolidating your federal loans in a qualified repayment program.
Public Service Jobs Qualifying for Public Service Loan Forgiveness:
- Any job in a government organization at the federal, state, local or tribal level
- Not-for-profit organizations that are designated tax-exempt under Section 501(c)(3)
- Other not-for-profit organizations that are not tax-exempt but provide a qualifying public service
- Full-time AmeriCorps and Peace Corps volunteers
The most common public service careers are in education, law enforcement, health, public law, and veterinary medicine.
Repayment Plans Qualifying for Public Service Loan Forgiveness and Income-based repayment
- Income-Based Repayment Plan (IBR): You get loan forgiveness after 25 years on on-time repayment.
- Income-Contingent Repayment Plan (ICR): You get loan forgiveness after 25 years on on-time repayment.
- Pay As You Earn Repayment Plan (PAYE): Loan forgiveness comes after20 years of on-time payments. You will have the lowest monthly payment but must demonstrate financial hardship to enter this plan, can still stay in it after the hardship.
- Revised Pay As You Earn Repayment Plan (REPAYE): Like the PAYE plan, only you don’t need to demonstrate financial hardship to qualify for the program.
The 10-year Standard Repayment Plan also is seen as a qualifying plan, but because it is for 10-years, there might not be any funds left to forgive. If you plan to enroll in a PSLF program, you also need to enroll in a repayment plan that increases your loan repayment term above 10 years.
To apply for PSLF, you must fill out an Employment Certification Form every year and make payments, W-2 forms, or other documentation available as requested.
Teacher Loan Forgiveness Program
The Teacher Loan Forgiveness program is used to encourage teachers to take jobs at elementary schools, secondary schools, and other educational service agencies that serve low-income families.
You need to teach fulltime at a qualifying school for five full and consecutive years. Then you are eligible to have from $5,000 to up to $17,500 in loans forgiven.
Only Direct subsidized and unsubsidized loans qualify. PLUS loans do not qualify for this forgiveness.
You can apply to the program by completing the Teacher Loan Forgiveness Application and submitting it to your loan servicer.
Loan Forgiveness for Nurses
This forgiveness program is for registered nurses, nurse practitioners, and members of nursing faculty, who work in high-need population areas or areas where there is a critical shortage that can qualify to have up to 85% of their loans forgiven under the NURSE Corps Loan Repayment Program.
They can have up to 60% of their student loans forgiven for working for two years in an underserved area, another 25% can be forgiven for working three years.
Some states also offer loan repayment assistance. Go to the Loan Forgiveness for Nurses website to see if yours is one of the 33 states that have one and what the eligibility requirements are.
Loan Forgiveness for Doctors
This is another loan forgiveness for healthcare professions, especially physicians, dentists, pharmacists, and mental healthcare workers. They have several options, both national and local, to receive loan forgiveness.
The requirements and the amount forgiven vary, depending on which program you enter. For example, the Navy Financial Assistance Program offers up to $275,000 in loan forgiveness in return for an eight-year commitment for active and reserve duty.
The National Health Service Corps offers up to $50,000 in loan repayment for two years of work at an approved site.
Loan Forgiveness for Lawyers
The law profession is also not left out in this. Lawyers who spend a few years practicing in public service or government offices have some of their law school loans forgiven.
For example, the Department of Justice provides up to $60,000 in loan forgiveness if you work there for at least three years. Also, the Air Force Judge Advocate program also gives up to $65,000 in loan forgiveness.
Some law schools forgive students who do not make up to $60,000 a year, you can check your school for their own amount and actual requirement.
Loan Forgiveness for Military
Each branch of the military has programs that help qualified members pay off their student loans, but the loan amounts forgiven and the requirements vary.
Income-Based Repayment Plans
This is among the second type of loan forgiveness that is based on how long you make on-time payments, under a qualifying repayment plan, that is, your repayment history.
As said earlier, the federal government offers four main repayment plans, this loan forgiveness program follows that plan.
They allow you to distribute your loan payments at a percentage of your monthly income. The remaining loan balance will be eligible for forgiveness after 20 or 25 years. depending on the plan.
Well, people who benefit from this plan are those with large loan balances in relation to their income. Remember that the amount forgiven is taxable.
You can apply for this Income-Based Repayment at StudentLoans.gov. You will need documentation on personal and financial information. Your loan servicer also can provide an application.
In addition, it is also available to Federal Student loans only, private student loans do not qualify.
By Student Discharge
There’s one additional way to achieve student loan forgiveness which is discharge. It is generally awarded by a judge and can apply to both Federal and private student loans.
Closed school discharge
You may qualify for loan discharge if your school closes. But, at the time of closure, you must have been enrolled or have left within 120 days, without receiving a degree. If you qualify, contact your loan servicer to start the application process.
You will continue making payments on your loan while your application is being processed. If approved, you will no longer have to make payments and you may be refunded some or all of the past payments you made.
Borrower defense to repayment discharge
This is another student loan forgiveness program that happens if your school had to assess the case of fraud or misidentification of borrowers. You will need to file a borrower defense to repayment claim with the U.S. Department of Education.
Total and permanent disability
If you cannot work because of a total and permanent disability, you may qualify to have your remaining student loan debt canceled. Just provide documents to prove it.
The government may monitor your finances for three years after you are discharged of the loan. If you don’t meet requirements during the monitoring period, the loans may be reinstated.
Get more information on the application process at disabilitydischarge.com.
If one dies, the federal loans will be discharged once a death certificate is submitted to the loan servicer.
Federal Perkins Loan Cancellation
This is a separate loan forgiveness program because your school is the lender.
To apply, contact the financial aid office of the school you got the Perkins Loan and request the application forms. You need to be a full-time employee in a qualified career.
Qualifying Perkins Loan Forgiveness Jobs:
- Soldier in hostile fire or imminent danger pay areas
- Law enforcement or corrections officer
- A nurse or medical technician
- VISTA or Peace Corps volunteer
- Librarian with a master’s degree
- An attorney employed in a federal public or community defender organization
- An employee for a public or nonprofit organization that serves high-risk children and their families from low-income communities
- A staff member for the educational component of the Head Start program
- A staff member for a state-licensed or regulated pre-kindergarten or child care program
- Professional provider of early intervention services for the disabled
- Speech pathologist with a master’s degree
- Special education teacher for children with disabilities in public, other nonprofit schools or educational service agency
- Teacher in a field designated by the state as teacher shortage areas like math, science, foreign language, etc
- Teacher in a designated educational service agency that serves students from low-income families
- A faculty member at a tribal college or university
You can have up to 100% of your Perkins Loans canceled or broken down over five years.
- 15% per year for the first and second year
- 20% for the third and fourth years
- 30% for the fifth year
Tips on student loan forgiveness
It is relatively easy to use student loan forgiveness plans. Just be sure you are applying to the correct program and meet all of its requirements.
You should start by;
What is the Loan Forgiveness Application Process?
The application process is not quite difficult. All you need to do is to fill out an application online. We have provided the links in each program above.
On the other hand, you can simply contact your loan service provider for the application form.
In the case of death, a provision of the certificate of death is all you need.
Do you see the hurdle applying for a student scholarship would have saved you?
The student loan forgiveness program is a real thing. All there is to know has been outlined and explained.
Read the post twice if you must. Make sure to understand it and apply all that you have learned.
Any questions? Get back to us in the comment box.
Student Loan Forgiveness FAQs
How do I know if I qualify for student loan forgiveness?
To receive loan forgiveness under this program, you must be a full-time employee (at least 30 hours per week) in a public service job and make 10 years of on-time monthly payments (120) after consolidating your federal loans in a qualified repayment program.
How can I get my student loans forgiven?
You can apply for these repayment plans with student loan forgiveness by calling your lender or going online to StudentLoans.gov.
Income-Based Repayment (IBR) …
Pay As You Earn (PAYE) …
Revised Pay As You Earn (RePAYE) …
Income Contingent Repayment (ICR) …
Public Service Loan Forgiveness (PSLF)
Will student loans be forgiven in 2021?
The U.S. Secretary of Education, Betsy DeVos has stated that the federal student loan administrative forbearance period has been extended through January 31, 2021. This doesn’t necessarily mean the loans have been forgiven, however, it gives the federal student loan borrowers some breathing room for the time being.
What is the Student Loan Forgiveness Act?
PSLF discharges borrowers’ remaining federal student loan balance after they make 10 years’ worth of payments while working for the government or a nonprofit. Borrowers defrauded by their schools may seek loan forgiveness through borrower defense to repayment.
How do I apply for student loan forgiveness?
Each type of student loan forgiveness program varies. For most, you fill out the correct form and submit it to your lender. For loan forgiveness as part of your repayment program, your loans are automatically forgiven at the end of the term.