Student loan forgiveness has become a hot-button topic, due in part to the Biden administration’s proposed plan for widespread debt cancellation for millions of federal borrowers. Though set to provide much-needed relief in a volatile economic climate, the plan’s acceptance has been delayed pending a decision by the Supreme Court.
While borrowers await new developments, there are still ways to obtain student loan forgiveness outside of Biden’s plan. Let’s take a look at different types of student loan forgiveness options and how to apply.
Federal student loan forgiveness through one or more government programs could be available to you depending on eligibility factors such as occupation, loan type, and income level. Learn more about eligibility for federal student loan forgiveness programs such as Public Service Loan Forgiveness (PSLF) here and Income-Driven Repayment (IDR) here.
If you think you could qualify for federal student loan forgiveness, start by contacting your loan servicer to see what types of federal student loans you have and if you need to take steps to consolidate them. You should also organize the information you’ll need for the application process:
Learn more about how to get student loan forgiveness here and read on to understand how to apply for different forgiveness programs.
If you’re having difficulty making your monthly student loan payments under the 10-year Standard Repayment Plan, then Income-driven Repayment (IDR) is something you could explore as a federal borrower. The IDR program consists of multiple plans that provide federal borrowers with options other than forbearance:
*Only new enrollments from borrowers of consolidated Parent PLUS loans are being accepted into the ICR plan. No change for current enrollees.
**New enrollments in PAYE are being accepted until further notice, but this plan will eventually be phased out. No changes for current enrollees.
IDR plans use various formulas to calculate repayment structures based on your adjusted gross income and family size, and also provides a path to eventual forgiveness. As a federal student loan borrower, you’re likely to qualify for more than one type of IDR plan. For help understanding which IDR plan could be right for you based on your unique financial profile, schedule a free call with one of our student loan specialists, and read on to learn more about how to apply.
To apply for IDR, follow these steps:
For guidance through the application process and help with compliance requirements once you’re enrolled in IDR, contact our student loan specialists here. We can help you track progress on your application and keep you current on the latest requirements for different forgiveness programs.
PSLF is a special federal student loan forgiveness program available to borrowers who work in government or nonprofit organizations. To be eligible for PSLF, you must:
PSLF is a notoriously complex program with frequently changing rules and requirements. For guidance through the PSLF application process and help staying up-to-date with the latest rules, contact our student loan specialist team.
Before you apply for PSLF, first find out if you qualify for the program. You can use this guide to understand if you have qualifying employment, or use the employer search tool on studentaid.gov to see if your current and past employers are on the eligible list. Given that PSLF requires enrollment in one of the four IDR plans, you’ll need to follow the steps outlined in the timeline above.
Loans made through the Federal Perkins Loan Program, which ended in 2017, are a type low-interest federal student loans for undergraduate and graduate students with exceptional financial need. While Perkins Loans are not eligible for PSLF, Perkins Loan holders doing eligible public service work could be eligible for, Perkins Loan Cancellation. You could receive partial or full cancellation of Perkins Loans if you perform certain kinds of service such as teaching at a Title I school or working in a law enforcement profession.
If you’re applying for Perkins Loan cancellation, learn about how to apply on the Student Aid website, and consider the following steps:
If you don’t qualify for any of the student loan forgiveness programs above, there are other options to manage student loan debt that you could consider.
Though not a long-term solution, forbearance or deferment could be an option if you’ve explored all potential forgiveness options and don’t qualify. Federal forbearance lasts 12 months, with the option to renew, and interest will accrue on your debt. Watch this video to learn more.
For federal student loan holders, consolidating federal loans into a Direct Consolidation Loan could simplify your monthly payments, lower your monthly payment amount, switch any variable-rate loans to fixed rate, and potentially give you access to forgiveness programs you didn’t otherwise have. Learn more about consolidating at studentaid.gov.
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