If you have student loans, you may be thinking about how to pay them off. You may not know that there are several ways to get help with your student loans. There’s no such thing as a free lunch, but there are lots of ways to reduce the cost of one! Are Student Loans Forgiven?
Student loan forgiveness
- Public service loan forgiveness (PSLF). This program forgives the remaining balance of your federal student loans if you work for a nonprofit organization, or in the public sector for a certain amount of time.
- Perkins loan cancellation and discharge. If you have Perkins loans, you may be eligible to get up to 100% of your loans forgiven if you’re a teacher at a low-income school, or an early childhood educator who provides services to low-income families.
- Teacher loan forgiveness. If you become a full-time teacher within four years after completing college, there are two different repayment plans available that allow teachers to reduce their monthly payments and get rid of their loans faster: IBR (income-based repayment) and REPAYE (revised pay as you earn). Both plans base payments on income rather than debt burden which can help lower monthly payments significantly compared with other federal options like PAYE and 10-year standard repayment plans. You’ll still have to make regular payments but they won’t be as high as what would otherwise be required under these programs since it’s based on your adjusted gross income each year instead of just how much money is owed overall.”
Student loan forgiveness is available for a number of different circumstances.
- The Public Service Loan Forgiveness Program forgives all of your federal student loans if you work full-time for a government agency or non-profit and make 120 on-time payments.
- Teacher loan forgiveness is available for teachers who teach in specific areas and meet certain qualifications.
- If you’re experiencing economic hardship, you may be eligible for an income-driven repayment plan that reduces your monthly payment amount based on your income.
Public Service Loan Forgiveness
Public Service Loan Forgiveness (PSLF) is available to public servants who are working full-time in public or nonprofit organizations. These occupations include:
- Public Education
- Public health
- Public interest law services (such as legal aid programs, public defender offices, and legal services organizations).
Perkins Loan cancellation and discharge
Perkins Loan cancellation and discharge are available for students who are enrolled in a qualifying program, or who work full-time or part-time in public service jobs. If you have Perkins Loans, you may qualify for a cancellation if you:
- work full-time as a teacher, librarian, or principal in a Title I school (or other eligible schools) that serves low-income families;
- work as an early intervention specialist for children with disabilities;
- provide services to people with disabilities through an agency that provides these services under federal law;
Or any other type of job that is considered public service by the government (such as law enforcement officer).
Teacher Loan Forgiveness
If you teach in a low-income school, you may be eligible for loan forgiveness. Teachers who work full-time for five consecutive years at an eligible school will receive up to $17,500 of their student loans forgiven. Eligible schools include those that serve low-income families or are determined by the U.S Department of Education as “high-need.”
If you want to apply for this benefit, make sure that your employment meets the following criteria:* You must work full-time at an eligible school.* The school must serve low-income families or be determined by the U.S Department of Education as “high-need.”
Income-driven repayment plans
If you have federal student loans, there’s a good chance that at least some of them are eligible for an income-driven repayment plan (IDR). These plans let you pay off your debt over a longer period of time and with smaller monthly payments. It can be helpful for students who want to avoid defaulting on their loans but need to hold down several part-time jobs to make ends meet.
For federal borrowers who are in IDR programs, the government will send them an annual notice informing them whether or not they qualify for these plans. If it says yes, all they have to do is log into their account on the U.S Department of Education website and apply—there’s no need to fill out additional paperwork or complete any extra paperwork at this point in time! Once again: keep track of when these notices come out each year so that once they arrive (which should happen within 60 days after the end of each school year), you can take advantage immediately without having missed any deadline dates discussed above (e.g., applying within 120 days).
Economic hardship deferment
If you have some type of economic hardship, there is a good chance you will qualify for an economic hardship deferment. To apply for this deferment, go to the studentloans.gov website and complete the application by entering information about your loans and income. You must also upload documents that prove that your financial situation makes it difficult for you to pay back your loans on time. You can do this by uploading copies of tax returns from the past two years or letters from employers or others who can attest to your current financial situation. There are several other factors that may lead to approval:
If you have only one loan serviced by FedLoan Servicing (this includes Direct Loans or FFELP loans), then you’ll need a recommendation from the Department of Education in order to get approved for an economic hardship deferment on those loans; however, if all of your student loans are managed by Nelnet (which includes many private lenders), then no recommendation is required because these lenders follow federal guidelines when making decisions about granting borrowers an economic hardship deferment
Student loan forgiveness is available for a variety of reasons
While no one wants to pay back student loans, there are many situations in which you can have your debt forgiven. Here’s how:
- First, make sure that you understand the difference between federal and private student loans. Federal loans are those given out by the U.S. government to help students pay for college through an eligible institution of higher education; these include Stafford Loans, PLUS Loans (for parents), and Perkins Loans (for students with disabilities). Private student loans are those not issued or backed by the government and must be paid back even if you complete a successful program of study or your loan expires while you’re enrolled in school.
- Next, review what types of federal loans can be forgiven under certain circumstances—and when they might become eligible for forgiveness on their own accord. For example:
- Public Service Loan Forgiveness offers forgiveness after 120 consecutive payments if your job qualifies as public service work; this includes teachers who work at low-income schools where most children qualify for free lunch programs under Federal Poverty Guidelines ($30,000 annually for one person).
- Teacher Loan Forgiveness allows educators who teach full-time at elementary schools or secondary schools that serve low-income families to receive full cancellation after five years (up from four) as long as they meet other eligibility requirements listed above.* A teacher must not have been convicted yet face criminal charges related to sexual misconduct against students or faculty members within the last 36 months when applying for this program.*
It’s important to know that you aren’t alone in your struggle with student loan debt. The average graduate leaves school with more than $30,000 in student loans, and that number continues to grow every year. With so many people struggling with this issue, it’s no wonder there are so many options available for forgiveness programs! If you’re looking for more information about how these programs work or if you think one might be right for you, visit Student Loan Hero’s free guide on student loan repayment options: