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If you’re like most college graduates, you left school with a substantial amount of debt. According to the Federal Reserve, adults in 2019 who had college debt typically owed between $20,000 and $24,999. For those struggling with student debt, loan forgiveness or loan discharge can sound like a dream come true. However, these programs are only available for federal student loans, not private ones, and the qualification requirements can be rigorous. Below, learn about the different programs available and how to apply. What Is Student Loan Forgiveness or Discharge?The U.S. Department of Education offers several forgiveness and discharge programs for federal student loans. You may qualify to have some or all of your loans forgiven or discharged in certain situations. While the terms student loan forgiveness or cancellation and loan discharge are often used interchangeably, they’re actually very different from one another. You may qualify for student loan forgiveness or cancellation based on your qualifications, such as your career path. Or, you may be eligible for loan discharge based on circumstances beyond your control, such as becoming totally and permanently disabled. Related: Student Loan Forgiveness Calculator How Does Student Loan Forgiveness Work?You can qualify for federal student loan forgiveness based on a range of circumstances, including the type of work you do, your disability status and whether the college you attended defrauded you. There are far fewer student loan forgiveness programs available for private student loans than federal loans. But if you’re having trouble making private loan payments, you can look into loan modification through your lender or repayment assistance programs. Each federal forgiveness option works a little differently, depending on whether it’s a discharge, cancellation or forgiveness program. Some, like Public Service Loan Forgiveness, require you to make a certain number of on-time monthly payments before applying for forgiveness. Others, like Perkins loan cancellation, provide forgiveness on an ongoing basis based on years of qualifying service. In most cases, you’ll have to provide proof of eligibility. 4 Student Loan Forgiveness ProgramsWith student loan forgiveness programs, you typically make payments for a set period of time. After you meet the forgiveness programs’ requirements, the remaining loan balance is canceled. 1. Income-Driven Repayment ForgivenessIncome-driven repayment (IDR) plan forgiveness is a good option if you cannot afford your payments under a 10-year standard repayment plan. With this approach, you enter into an IDR plan, which bases your monthly payment on your family size and discretionary income. Depending on your situation, you could qualify for a much lower monthly payment than you’re making now. Your repayment term may be 20 or 25 years, depending on what plan you choose. If you still have a balance at the end of your repayment period, the remaining amount is forgiven. However, the canceled loan amount may be taxable as income. To qualify for IDR plan forgiveness, you must be eligible for one of the following IDR plans and have a balance after making payments for the full repayment term:
You can apply for an IDR plan online or by contacting your loan servicer. 2. Perkins Loan Cancellation and DischargeIf you have Perkins loans—the last of which were issued in 2018—and work in public service, you may be eligible for partial or full loan forgiveness. Depending on your position, you could have up to 100% of your loans forgiven within five years. Below is the list of eligible career paths and the amount of debt that can be canceled. To apply for Perkins loan cancellation, you must contact the school that made the loan. 3. Public Service Loan ForgivenessUnder Public Service Loan Forgiveness (PSLF), some federal loan borrowers can have their loans forgiven after 120 monthly loan payments. To qualify, you must work for an eligible non-profit organization or government agency full-time while making 120 monthly qualifying payments. Payments made under an IDR plan count as qualifying payments for the purposes of PSLF. The loan balance forgiven through PSLF is not taxable as income. You can use the PSLF Help Tool to find out if your employment and loans qualify for forgiveness. 4. Teacher Loan ForgivenessWith the Teacher Loan Forgiveness Program, you can qualify for up to $17,500 in loan forgiveness if you teach full-time for five full and consecutive academic years in a low-income elementary or secondary school or educational agency. Borrowers with the following loan types are eligible:
Only teachers of certain subjects, such as mathematics or science, are eligible for the full $17,500 of forgiveness. Teachers of other subjects may qualify for $5,000 of forgiveness instead. To apply, submit the Teacher Loan Forgiveness application to your loan servicer after completing five years of service. 7 Student Loan Discharge ProgramsStudent loan discharge programs can provide some relief when there are extenuating circumstances that affect your ability to attend school or repay your loans. There are seven different loan discharge programs for federal loans. 1. Borrower Defense to RepaymentIf you attended a school that intentionally misled you or engaged in other misconduct, you might qualify for loan discharge through borrower defense to repayment. For example, if the school falsely claimed it was accredited or made false promises about your job prospects, you may be eligible for borrower defense to repayment. Borrower defense discharge only applies to federal student loans. The school’s misconduct must have been directly related to student loans you took out or the educational service for which the loan was provided. To apply for borrower defense discharge, complete the online application form, and submit it to your loan servicer. If you have supporting documentation, such as school marketing materials or email exchanges with college officials, include those documents along with your application. 2. Closed School DischargeIf your school closed while you were in school or soon after you withdrew, you might be eligible to have up to 100% of your direct, Federal Family Education Loan Program (FFEL) or Perkins loans discharged through a closed school discharge. You can qualify if you were unable to complete your program because your school closed and if you were still enrolled at the time. You can also qualify if you were on an approved leave of absence at the time of the closure or your school closed within 120 days after you withdrew. Contact your loan servicer to apply for a closed school discharge. 3. Discharge Due to DeathIn the unfortunate circumstance where the student loan borrower or student for whom the loan was taken out dies, the loan can be discharged. All federal loans are eligible. With parent loans, including Parent PLUS loans, the loan is discharged if the parent borrower dies or if the student on whose behalf the parent obtained the loan dies. To apply, a family member or other representative must submit proof of death, such as a death certificate, to the loan servicer. 4. Discharge in BankruptcyIn some situations, you may have your student loans discharged during bankruptcy proceedings. To qualify, you must file for a Chapter 7 bankruptcy and file a separate action known as adversary proceedings. As part of this process, you must prove that repaying your loans would impose undue hardship on you and your family. Undue hardship is defined by the following:
Keep in mind that discharge in bankruptcy is rare, and your creditors can challenge your filing. 5. False Certification DischargeIf you took out direct or FFEL loans and your school falsely certified your eligibility to receive a loan, you might qualify for a false certification discharge. There are three main scenarios where you may qualify:
Depending on your situation, you have to complete the corresponding false certification loan discharge application and submit it to your loan servicer to apply for discharge. 6. Total and Permanent Disability DischargeIf you have direct, FFEL or Perkins loans or a TEACH grant, you can qualify for loan discharge if you become totally and permanently disabled through Total and Permanent Disability discharge. There are three entities that can help qualify you for Total and Permanent Disability discharge:
Student Loan Forgiveness for Nurses, Teachers and Other CareersIn addition to Public Service Loan Forgiveness, there are several more specialized forgiveness programs for public service workers such as nurses and teachers. There are also state-based and federal repayment assistance programs for healthcare workers ranging from certified nurse midwives to licensed clinical social workers. Lawyers focused on public interest law can take advantage of law school- and employer-run repayment and forgiveness options. Dentists also qualify for many federal and state forgiveness programs, as do veterinarians who commit to working for a certain number of years in an area with a shortage of qualified veterinary professionals. In general, career-specific forgiveness requires a service commitment or confirmation that you’re supplying services to high-need or low-income communities. Are Parent Borrowers Eligible for Loan Forgiveness or Discharge?Parent borrowers are eligible for most forms of loan forgiveness or discharge, but there may be extra steps to qualify. Below is the list of programs and parent eligibility details. Alternatives to Student Loan ForgivenessUnfortunately, not everyone will qualify for federal loan forgiveness. If you aren’t eligible, consider these alternatives instead. Request Forbearance or DefermentIf you have a medical emergency or a financial hardship, such as an unexpected job loss or childcare issue, you can request a deferment or forbearance from your loan servicer. You can temporarily postpone your payments for several months, allowing you to skip payments without becoming delinquent. Contact your federal loan servicer for details. Research State Loan Assistance ProgramsDepending on your state and profession, you may be eligible for a state loan assistance program. Several states will give you money to repay a portion of your student loan debt in an effort to recruit and retain talented professionals. For example, lawyers in Florida may qualify for the Florida Bar Association’s Loan Repayment Program. Staff attorneys who work for government agencies, nonprofits and other public service organizations can receive up to $5,000 per year to repay their loans. Both federal and private student loans are eligible. In Washington, healthcare professionals can receive up to $75,000 if they work for at least three years in designated health professional shortage areas within the state through its State Health program. Check with your state department of education to see if similar programs are available where you live. Compare Personalized Student Loan RatesTakes Up To 3 Minutes Frequently Asked Questions (FAQs)How can I get student loan forgiveness from Covid?Since the Covid-19 crisis began, there has been an extended pause in federal loan payment collection and 0% interest on certain federal student loans. Payments are set to resume on January 1, 2023. President Joe Biden also announced that up to $20,000 in federal student loans can be forgiven. Eligible borrowers who earn less than $125,000 annually (or $250,000 if filing taxes jointly) can have $10,000 of debt forgiven; borrowers who meet the same income requirements and also received a Pell Grant can have up to $20,000 forgiven. Most borrowers will have to submit an application to request forgiveness. Applications became available in October 2022 and will be accepted until December 31, 2023. Why is student loan forgiveness a bad idea?For most borrowers, student loan forgiveness is a major source of financial and emotional relief, especially if they’d been struggling to afford loan payments alongside other bills and necessities. However, there are potential disadvantages for some borrowers. Most forgiveness programs require years of repayment before you can qualify; depending on the plan, you could be in debt for 25 years before you get forgiveness. Debt cancellation also isn’t guaranteed, and there’s a risk that you complete your obligations but are still ineligible for another reason. What is tax-free student loan forgiveness?Many student loan forgiveness programs consider forgiven debt to be taxable income, meaning you may be required to pay federal tax on any debt that’s canceled. But there are several exceptions. Public Service Loan Forgiveness provides tax-free loan forgiveness. Forgiven debt through Covid-19 relief, income-driven repayment and Total and Permanent Disability discharge programs also will not be taxed through 2025 according to recent regulatory changes. Depending on your location, however, you may face state taxes on student loan forgiveness. What happens if you don't pay student loans?If you don’t make student loan payments as agreed, the consequences depend on whether you have federal or private student loans. For federal loans, your debt will become delinquent as soon as you miss a payment, and your loan servicer will report that delinquency to the credit bureaus—meaning it will wind up on your credit report—after 90 days of nonpayment. At 270 days of nonpayment, your loans will be in default, opening you up to consequences including garnished wages or tax refunds and loss of further financial aid. The timeline for private loans is quicker: Your lateness could be reported to the credit bureaus immediately after missing a payment, and you could go into default after 90 days. Private lenders don’t have the same collections powers as the federal government, but they could sue you for the outstanding debt or hire a collections agency to contact you. How do I pay off student loans fast?If you’re eager to pay off student loans quickly, you could pay more than the minimum required each month, which will never result in a prepayment penalty. You could also refinance student loans to a lower interest rate if you qualify, and choose a shorter repayment timeline than you previously held. In that case, your monthly payment may go up. But you’ll have the opportunity to save money on interest and get rid of loans quickly. Can I get my student loan paid off?Is it really possible to have my federal student loans forgiven or to get help repaying them? The answer: Yes! However, there are very specific eligibility requirements you must meet to qualify for loan forgiveness or receive help with repayment.
Do student loans go away after 7 years?Do student loans go away after 7 years? Student loans don't go away after seven years. There is no program for loan forgiveness or cancellation after seven years. But if you recently checked your credit report and are wondering, “why did my student loans disappear?” The answer is that you have defaulted student loans.
How can I get out of student loan debt?Here are seven legal ways you can get out of paying your student loans.. Public Service Loan Forgiveness. ... . Teacher Loan Forgiveness. ... . Perkins Loan cancellation. ... . Income-driven repayment plans. ... . Disability discharge. ... . Bankruptcy discharge. ... . Get an employer who will pay off your loans.. When can I get student loan forgiveness?The Public Service Loan Forgiveness (PSLF) program forgives the remaining balance on your federal student loans after 120 payments working full time for federal, state, Tribal, or local government; the military; or a qualifying non-profit.
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