Student Loan Forgiveness Debt Relief
The subject of student loan forgiveness and cancellation can be a confusing and overwhelming one, with many different programs and options available to borrowers. However, understanding these programs and how they can help you can be crucial to managing and ultimately eliminating your student loan debt.
Student loan forgiveness and cancellation programs help borrowers reduce or eliminate their student loan debt under specific circumstances. These programs are generally available for federal student loans, such as Direct Loans, Federal Family Education Loans (FFEL), and Perkins Loans. Let’s dive into the different forgiveness and cancellation programs available to borrowers.
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Eligibility for Loan Forgiveness and Cancellation Programs
Eligibility for loan forgiveness and cancellation programs varies depending on the program and the borrower’s circumstances. Some programs, such as the Public Service Loan Forgiveness program, are only available to certain types of borrowers, such as government employees or non-profit workers. Other programs, like the Income-Driven Repayment plan, are based on the borrower’s income and family size.
It is important to note that not all loans are eligible for forgiveness or cancellation. Federal Direct Loans, Federal Family Education Loans (FFEL), and Federal Perkins Loans are eligible for most forgiveness and cancellation programs, but private loans are not.
Public Service Loan Forgiveness (PSLF)
The Public Service Loan Forgiveness (PSLF) program forgives the remaining balance on Direct Loans after making 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.
- Must have Direct Loans or consolidate other federal student loans into a Direct Consolidation Loan.
- Enroll in a qualifying repayment plan, such as an Income-Driven Repayment (IDR) plan.
- Work full-time for a qualifying employer, such as a government organization or a not-for-profit organization.
- Make 120 qualifying monthly payments.
- Submit the PSLF Help Tool to determine eligibility.
- Complete and submit the Employment Certification for Public Service Loan Forgiveness form annually or when changing employers.
- Once 120 qualifying payments are made, submit the PSLF Application.
Income-Driven Repayment (IDR) Plans
Income-Driven Repayment plans are based on the borrower’s income and family size. These plans cap monthly loan payments at a percentage of the borrower’s income, and may also forgive any remaining balance after a certain number of years of payments. There are several different IDR plans available, including the Revised Pay As You Earn (REPAYE) plan and the Income-Based Repayment (IBR) plan.
Teacher Loan Forgiveness
The Teacher Loan Forgiveness program is designed to help teachers who work in low-income schools by forgiving up to $17,500 of their Direct Loans or Federal Family Education Loan (FFEL) Program loans.
- Must be a highly qualified teacher.
- Must work full-time for five complete and consecutive academic years at a low-income school or educational service agency.
- Must have Direct Loans or FFEL Program loans that were disbursed after October 1, 1998.
- Complete and submit the Teacher Loan Forgiveness Application after completing the required five years of service.
- The chief administrative officer of the school or educational service agency must certify the application.
Military Service Loan Forgiveness and Cancellation
Active duty service members, veterans, and their families may be eligible for loan forgiveness and cancellation through programs such as the Military Service Loan Forgiveness and the Veterans Affairs (VA) Loan Service. These programs provide loan forgiveness or cancellation for certain types of loans, including Federal Direct Loans and Federal Family Education Loans (FFEL).
Perkins Loan Cancellation
Perkins Loan Cancellation is a program for borrowers with Federal Perkins Loans who work in certain public service jobs or teach in low-income schools. A percentage of the loan is canceled for each year of qualifying service.
To qualify for Perkins Loan Cancellation, you must:
- Have Federal Perkins Loans
- Work in a qualifying public service job or teach in a low-income school
- Complete the required years of service
Contact the school that made your Perkins Loan or its loan servicer to apply for cancellation. They will provide you with the necessary forms and guidance on the application process.
Total and Permanent Disability (TPD) Discharge
Total and Permanent Disability Discharge is a program that relieves borrowers of their student loan debt if they become totally and permanently disabled.
To qualify for TPD Discharge, you must:
- Have Direct Loans, Federal Stafford Loans, Perkins Loans, or a TEACH Grant service obligation
- Provide proof of total and permanent disability
- Complete the TPD Discharge Application and gather supporting documentation.
- Submit your application and documentation to Nelnet, the servicer that manages the TPD Discharge process.
- Nelnet will review your application and notify you of the decision.
Closed School Discharge
Closed School Discharge is a program that forgives student loan debt for borrowers whose school closed before they could complete their program.
To qualify for Closed School Discharge, you must:
- Have Direct Loans, Federal Stafford Loans, or FFEL PLUS Loans
- Be unable to complete your program due to the school’s closure
Contact your loan servicer to apply for Closed School Discharge. They will provide you with the necessary forms and guidance on the application process
Borrower Defense to Repayment
Borrower Defense to Repayment is a program that allows borrowers to request loan forgiveness if their school engaged in misconduct or violated state laws related to their education.
To qualify for Borrower Defense to Repayment, you must:
- Have Direct Loans
- Provide evidence of the school’s misconduct or violation of state laws
- Complete the Borrower Defense to Repayment Application.
- Submit your application and supporting documentation to the U.S. Department of Education.
- The Department will review your application and notify you of the decision.
Other Forgiveness and Cancellation Programs
There are also other forgiveness and cancellation programs available, such as the Nurse Corps Loan Repayment Program and the Indian Health Service Loan Repayment Program. These programs are designed for specific groups of borrowers, such as nurses or American Indian and Alaska Native health professionals.
Managing and paying off student loans can be a difficult task, but there are many programs available that can help. From Public Service Loan Forgiveness to Income-Driven Repayment plans, borrowers have options to help them manage and eliminate their student loan debt. It is important to research the different programs and understand the eligibility requirements to determine which options may be best for you.