If you have student loan debt, it’s important to know that there are a variety of ways to get your debt forgiven. In this article, we’ll outline the different student loan forgiveness programs available and what you need to do to qualify.
What is student loan forgiveness debt?
Student loan forgiveness debt is when you have taken out a loan to attend school and then are no longer in school, or have graduated but are still paying back the loan. The government may forgive part or all of your student loan if you meet certain requirements. There is no such thing as student loan forgiveness debt if you default on your loan.
There are a few ways to qualify for student loan forgiveness debt. You may be eligible if you are currently unemployed and making 120% or less of the Federal Poverty Guidelines (FPG), which is $11,880 for an individual or $22,120 for a family of four in 2016. You may also be eligible if you are permanently disabled, making less than 50% of your FPG, or deceased. You may also qualify if you make 120% or less of the FPG for three years in a row.
You will need to apply for student loan forgiveness debt through your lender. Each lender has different requirements, so it is important to speak with them about your eligibility before applying. You will likely need to provide documentation proving your eligibility and proof that you are still paying back the loan.
If you are approved for student loan forgiveness debt, the government
Types of student loan forgiveness debt
There are a few different types of student loan forgiveness debt.
The most common type of student loan forgiveness debt is called Perkins Loans. Perkins Loans are low-interest loans that were made available to students who were enrolled in a degree or certificate program at an eligible school. The government will forgive the remaining balance of your Perkins Loan after you complete your program of study.
Another type of student loan forgiveness debt is called FFELP Loans. FFELP Loans are Federally Financial Assistance Loans made to students who are attending an eligible school. The government will forgive the remaining balance of your FFELP Loan after you complete your program of study.
There is also Federal Direct Unsubsidized Stafford Loan Debt which is a type of student loan that does not have any government assistance and consequently has a much higher interest rate than other types of student loans. If you have federal direct unsubsidized Stafford Loan Debt, the government will only forgive the remaining balance after you have made 120 consecutive on-time payments or have completed a full undergraduate degree.
There are also private loan forgiveness programs that are not associated with any educational institution. For example, some companies offer loan forgiveness if employees remain with the company
How to qualify for student loan forgiveness debt
There are a few ways to qualify for student loan forgiveness debt. To be eligible, you must have a qualifying federal student loan, which must be in good standing, and you must have completed at least 120 consecutive semester or quarter hours of undergraduate or graduate level coursework at an eligible school. There are a few exceptions to this rule, so check with your loan servicer to be sure.
Once you meet the requirements, it’s important to realize that forgiveness debt is not free money. You will need to meet certain eligibility requirements and make contributions to income-based repayment plans or pay back your loans over a longer period of time. However, if you can afford it and want to take advantage of student loan forgiveness debt benefits, it can be a great way to reduce your overall debt burden.
Steps to take to apply for student loan forgiveness debt
If you are struggling with student loan debt and want to learn more about ways to get relief, here are a few steps you can take:
1. Check if your school offers student loan forgiveness. Many schools offer some type of relief for students who meet certain requirements, such as maintaining a certain GPA or completing a specific number of course hours.
2. Consider refinancing your student loans. Refinancing can help you lower your monthly payments, which can help reduce your overall debt burden.
3. Explore other types of debt relief options. There are many programs available that can help relieve some or all of your student loan debt. Contact the various agencies that offer these programs to find out more about eligibility and requirements.
What to do if you are approved for student loan forgiveness debt
If you are approved for student loan forgiveness debt, there are a few things you will need to do in order to take advantage of the program.
First, you will need to contact the loan servicer that issued the loan and let them know that you have been approved for student loan forgiveness debt.
Next, you will need to submit a formal application for student loan forgiveness debt with the Department of Education.
Finally, you will need to provide supporting documentation such as your repayment history and proof of your eligibility for student loan forgiveness debt.
When you graduate from college, the burden of student loan debt may feel like it’s impossible to overcome. But don’t despair! There are many strategies available to help relieve some or all of your student loan debt. One option is to pursue forgiveness debt, which means that after a set number of years of on-time payments, your loans will be forgiven. Before making any decisions, though, it is important to consult with an experienced financial advisor who can help you understand your options and make the best possible decision for you.