Student Loan Loan Forgiveness

Student Loan Loan Forgiveness

If you’re a college student, you know that the cost of your education can be prohibitive. And if you’ve borrowed money for school and are still paying it back after graduation, it can be even more frustrating—especially if your salary is low relative to your debt load. The good news is that there are programs designed to help reduce the burden of student loans. These programs include Teacher Loan Forgiveness and Public Service Loan Forgiveness (PSLF). The details vary depending on your situation and which program(s) apply to you but they share some common features:

Who Is Eligible for Loan Forgiveness?

Who is eligible for student loan forgiveness?

In order for you to be eligible for student loan forgiveness, the following must be true:

  • You must work in a public service job. This includes any federal or state government employee or agency, as well as employees of a 501(c)(3) nonprofit organization (such as AmeriCorps). There are some exceptions, but these are the most common.
  • You must have Direct Loans or FFEL Program loans (FFEL is an acronym that stands for Federal Family Education Loan). If you have Perkins Loans or Health Professions Student Loans (HPSL), they aren’t eligible. However, if your employer pays off one of these loans on your behalf, it could count toward loan forgiveness through Public Service Loan Forgiveness.

Teacher Loan Forgiveness Program

The Teacher Loan Forgiveness Program is another way to have your student loans forgiven. Teachers are eligible for up to $17,500 in student loan forgiveness under this program if they teach full-time for five consecutive years at a low-income school that serves low-income families. The federal government defines “low income” as an annual family income less than $45,000 and “low poverty” as a school where more than 50 percent of students receive free or reduced lunch.

For example: If you were a kindergarten teacher with a master’s degree at the beginning of 2016 who taught full time until 2021 at an elementary school serving primarily low-income families (e.g., 30% or more qualify for free or reduced lunch), then by 2021 your remaining balance will be forgiven under this program!

Public Service Loan Forgiveness Program

You may qualify for Public Service Loan Forgiveness if you’re employed full-time in a public service job and meet the following eligibility requirements:

  • Make 120 qualifying payments on your eligible federal student loans. Payments must be made after October 1, 2007, while you’re employed at least 30 hours per week by an employer that qualifies as a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code (IRC); or if your employer is not included on this list but is considered tax-exempt under IRC Section 501(c)(3) based on another provision of the IRC; or if your employer is a state government agency whose employees are considered to be providing services of “national importance” by their employing agencies.
  • For each year during which you make those 120 monthly payments (and only those years), your monthly payment can be no more than 10% of your discretionary income (defined as adjusted gross income minus 150% of the poverty line for family size).

You can make payments while attending school, during a grace period after leaving school before entering repayment and during deferment periods — up to 10 years total time allowed for making payments toward qualification for forgiveness through PSLF — but any time spent in forbearance does not count toward qualification. You do not have to reapply every year or even every few years; once approved and enrolled in automatic loan repayment plans like Income-Driven Repayment plans or Pay As You Earn (PAYE), there should never be any reason why you would need to reapply again unless something changes such as changing employers who qualify under PSLF criteria

There are programs to help you reduce your student loan debt.

There are programs to help you reduce your student loan debt.

You can only get help with federal student loans ( these are also called direct loans). But, some lenders offer loan forgiveness for private student loans (these are also called private loans because they’re not made or guaranteed by the government). Some lenders even offer both types of forgiveness.

If you’re struggling to make your student loan payments, there are options available to help. The best way to find out if you qualify for student loan forgiveness is by reaching out and speaking with a professional who can walk through all of your options with you. If you’re looking for more information on how these programs work, take a look at the full article below!

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