Forgiveness of student loans was a big deal last year, and as 2024 gets underway, that will probably still be the case. President Joe Biden's landmark student loan forgiveness program which would have eliminated up to $20,000 in debt for millions of borrowers was overturned by the Supreme Court this summer. Notwithstanding that failure the Biden administration is presently carrying out several student loan relief programs and according to the Education Department more than $100 billion in student debt cancellation has already been authorized and put into action.
Only direct loans made by the federal government (currently known as the William D. Ford Federal Direct Loan Program) are eligible for student loan forgiveness. Non-federal loans (those issued by private lenders and loan companies) are not part of this program.
In addition, if you work for a federal agency, your employer may repay a portion of your loans (up to $10,000 of your loans per year, with a maximum of $60,000) through the federal student loan repayment program.
1. Public Service Loan Forgiveness (PSLF)
The Public Service Loan Forgiveness Program (PSLF) is designed specifically for people who work in public service jobs for either the government or a nonprofit organization. You may also be able to get all or part of your loan forgiven due to specified volunteer work, military service or medical practice.
Qualifying Criteria and Pathways to Debt Relief:
To have debt forgiven under the public service program you must first make 120 qualifying payments (which means paying the minimum amount due on time). These payments must be made while you are working for a qualified employer generally, a federal, state or local government or a nonprofit organization with tax-exempt status.
In effect you qualify after 10 years on the job and 10 years of monthly payments (120 payments overall).
Potentially eligible positions include those in nursing government, police and fire departments, and social work. Only payments made after Oct. 1, 2007 qualify for the purposes of determining eligibility.
2. Repayment Plans With Loan Forgiveness
If you aren’t working in a public service position you may still be able to get a portion of your student debt forgiven but it will take longer. Federal income-driven repayment plans, designed to help graduates who would have trouble making payments within the standard 10-year time frame, also allow for some debt forgiveness after a certain period.
These plans include:
If you work or volunteer for certain organizations, you may be eligible for additional programs that will forgive or reduce your student debt. Here are some examples:
AmeriCorps VISTA, AmeriCorps NCCC, or AmeriCorps State and National programs: Volunteers for these programs can receive up to the maximum Pell Grant award toward repaying qualified student loans (loans backed by the federal government) through the Segal AmeriCorps Education Award. For the 2023–2024 school year this amounts to $7,375.
Army National Guard: The Army National Guard’s Student Loan Repayment Program can help you earn up to $40,000 toward loans.
Full-time teachers in low-income schools or educational service agencies: Through the Teacher Loan Forgiveness Program, teachers may be eligible for forgiveness of up to either $4,000 or $17,100 on their Federal Direct and FFEL Program loans after five consecutive years of service. The higher amount is for certain math, science, and special education teachers. The Education Department has further details on its website.
The U.S. government (and ultimately the nation's taxpayers). Most student loan lenders are huge institutions, such as commercial banks or the government (specifically, the Department of Education). Until 2010, student loans were usually originated by a private lender but guaranteed by the government. The Health Care and Education Reconciliation Act of 2010 ended the practice, replacing such guarantees with direct lending from the federal government.
Yes, student loan interest can be forgiven if the loan itself is forgiven. Generally, though, you can’t get loan interest forgiven by itself. If you want to pay less in student loan interest, consider refinancing the debt. In addition, some lenders will knock a bit off your loan’s current rate if you make automatic payments each month, in what’s known as an Automated Clearing House (ACH) discount.
Depending on the particular program, different people may qualify for different student loan debt relief options. Nevertheless, the majority of programs have requirements for borrowers, such residing in a specific area working in a specific industry or having a specific amount of debt.
Borrowers normally need to fill out an application and send it to the program administrator in order to apply for student loan debt relief. Depending on the program, the application procedure may change, but generally speaking, borrowers must supply information about their employment, debt, and income.
One of the most significant obstacles to student loan debt relief is the qualification process for accessible programs. Certain programs also have lengthy waiting periods or other limitations.
Debt relief for student loans may be a beneficial choice for borrowers who are having difficulty making their loan payments. Before applying, it's crucial to comprehend the many programs that are offered and to give your eligibility and options serious thought. It highlights choices including Public Service Loan Forgiveness (PSLF) and income-driven repayment plans while outlining important terms categories of forgiveness, and specific programs. It discusses eligibility requirements, application procedures and benefits it also highlights difficulties and exhorts borrowers to look into possible relief options.