How Can I Apply For Student Loan Forgiveness

If you have student loans, you’re not alone. According to the National Center for Education Statistics, 40 million Americans had a student loan balance in 2018. If you need help managing your debt and understanding your repayment options, we’ve got some tips for you!

Make 10 years of on-time payments.

To qualify for student loan forgiveness, you must make 10 years of on-time payments. On-time payments include tax refunds and other credits that the IRS sends you directly to your lender:

Sign up to receive those funds electronically so they are automatically applied to your account.
Set up auto pay so that a small portion of each payment is withdrawn from your bank account and sent electronically to your student loan servicer.
If you do not have an electronic method in place, mail in a check every month on time or as soon as possible if you miss the deadline by just a few days (don’t worry about sending in an extra payment).

Choose the right repayment plan for your circumstance.

If you have federal student loans, there are several types of repayment plans available to you. These include:

Fixed-rate: fixed for the life of the loan
Graduated: increases every two years until reaching an amount that is equivalent to a standard 10-year repayment plan (payments will never be more than they would be under this plan)

If you have low income and are struggling with debt, it may make sense for you to choose a fixed rate plan. This sounds counterintuitive because interest rates are lower on graduated plans than on fixed ones. However, if your income is too high for the lowest payment offered by a graduated plan but not high enough to afford the highest payment offered by a standard 10 year repayment plan (or any other type), then taking out more loans in order to pay off what you owe faster will leave very little money left over after paying back your loans. At this point it’s worth considering consolidating into one larger loan at an interest rate slightly higher than what most credit cards charge and using those funds toward paying down as much principle as possible before entering into another period of repayment—which will likely start at higher monthly payments due until about 20 years after graduation!

Enroll in the Public Service Loan Forgiveness Program.

You can apply for Public Service Loan Forgiveness after making 120 qualifying payments. You can qualify for PSLF if you work in a public service job, such as:

Government agency or federal, state or local government unit (includes public schools)
501(c)(3) non-profit organization

Work with a loan servicer that is part of the Servicemembers Civil Relief Act (SCRA).

The SCRA is a law that gives certain protections to military members. As such, it can make it easier to get student loan forgiveness.

To find out if your student loan servicer is part of the Servicemembers Civil Relief Act (SCRA), call them or visit their website and ask. Once you know, follow these steps to apply:

Complete an application form with your loan servicer that includes any documentation requested by them (for example, proof of active duty status)
Make sure you include a letter from your commanding officer confirming his/her intentions for you to receive this benefit

Use student loan forbearance and deferment wisely.

If you are unable to make payments on your student loans, there are two options that may be available to you: forbearance and deferment.

Forbearance is a short-term option that allows borrowers who are temporarily unable to make payments on their student loans to stop making those payments for a certain period of time. During this time, interest continues to accrue at the regular rate on unsubsidized loans and at half of the regular rate for subsidized loans. This can be an expensive option if left in place too long or used repeatedly—be sure to only use forbearance as long as necessary so that interest doesn’t mount up too much!

Deferment is similar in some ways but different in others: it allows borrowers who are temporarily unable to make payments due to financial hardship (e.g., unemployment) or other specific reason (e.g., disability) not only stop making payments but also keep up with interest during this time period by paying off portions of their loan balance each month based on income level relative towards what would have been paid if they were making regular monthly payments during normal periods when they had more cash flow available than usual (i.e., high school students). Deferments will end once all qualifying criteria have been met–these include maintaining satisfactory academic progress toward completion of degree program requirements; timely filing certification forms annually at certain points during enrollment process; submitting any required documentation regarding change(s) made between initial paperwork filing date(s) and subsequent ones needed over course duration; etcetera (please refer back here often).

Avoid identity theft.

Identity theft can occur when you give out your Social Security number. The number is used to apply for loans and other financial products, so it’s important to be careful about whom you share it with.

Don’t give out personal information like your address, phone number or bank account details to anyone who asks for them.
If a business asks for your credit card number or tax information, hang up the phone (and never give out these details).
Never share health records with anyone unless they work in the healthcare industry and have a legitimate reason for doing so.

There are options to help you manage your student loans, so you can prioritize paying them back on time.

Student loan forgiveness is a great way to get out of debt. Some programs offer full or partial forgiveness, while others cap payments at a certain amount each month. The options vary based on the type of debt you have and type of program that applies; contact your lender or credit union for more information.
Making payments on time helps your credit score and saves money in interest charges over time, which can reduce what you owe overall by thousands of dollars! Paying off your student loans early also provides peace-of-mind knowing that they are paid off sooner rather than later.

We hope that this guide has given you more clarity about the options available to help you manage your student loans. If you’re still unsure about which option is right for you, reach out to a financial planner or speak with one of our Student Loan Specialists for advice on managing your debt burden. Just remember: there are plenty of options out there that can help relieve some stress around repaying student loans—you just have to know where (and how) to look!

How Can I Apply For Student Loan Forgiveness