Many factors determine the best student loan forgiveness programs. Finding the best one requires careful research and time. Generally, it all comes down to which university or college you attend or the amount of loan you borrowed. Biden Administration canceled over $2.3 billion of student debt for more than 100,000 student loan borrowers. You, too, can qualify for that loan forgiveness program. Let’s discover the choices students and graduates have in detail. And how it can positively affect you as well.
Private Student Loan Forgiveness Options To Consider
The advantages of federal student loan forgiveness programs over private student loans are massively apart. But that does not mean you are out of options! There are still ways to cancel your private student loans. Some methods might be unethical but let’s list them anyway.
- Loan cancellation due to death
- Loan cancellation due to permanent disability
- Declaring bankruptcy (rare, but it’s possible on some occasions)
The ways, as mentioned earlier, are in no way supported or promoted by the author. Additionally, some other ways or situations might work in your favor. It all depends on the financial situation you are in and the lawyer representing you.
The best way of tackling private student loans is through refinancing. This option is great as it provides borrowers with some flexibility. Meaning you can get a flexible loan duration while you save up to pay them. Additionally, it gives the benefit of lower monthly payments if you can get lucky on finding one with lower interest rates. Moreover, if you work for a government institution such as the Peace Corps or the military, you are given the option of postponement on your loan payments. And if you are troubled with financial distress, you are also given the option of forbearance. Important to note if you choose any of these options, your monthly payments will halt at the cost of increased interest rates.
Federal Student Loan Forgiveness: The best options you have
Federal student loans are halted with increasing interest rates until September 30, 2021. However, this doesn’t mean you automatically are eligible for student loan forgiveness.
In the halt duration, when monthly payments are delayed, it certifies for student loan forgiveness.
Additionally, suppose you are looking for more loan forgiveness benefits. In that case, there are few programs to consider that are eligible: Direct Loans such as William D Ford Act Federal Direct Loan Program. FFEL and Perkins Loans.
Furthermore, you can apply for a loan consideration if you don’t have a Direct Loan. This will further your chances of qualifying for loan forgiveness by turning your current loans into Direct Loan Consolidation. Word to the wise, if you opt for loan consolidation, your current loans will restart.
Keep in mind if you do consolidate your non-direct loans, you will not get the benefit of qualifying for loan forgiveness.
Here are the best student forgiveness programs to ponder upon:
Public Service Loan Forgiveness (PSLF)
If you happen to work for the government sector or a nonprofit organization, you can qualify for the Public Service Loan Forgiveness Program. This is for those who have paid their debt while having work experience of over ten years. This program will forgive your remaining debt (Direct Loans) if you do match the criteria.
If you do qualify for the PSLF, you can sign up for an income-based repayment plan. This will decrease your monthly payment amount.
Income-Driven Repayment Forgiveness
The U.S. Department of Education offers Income-Driven Repayment Forgiveness in four types.
Each of these plans has different repayment conditions and requirements. Nonetheless, it fixes your payments by changing the monthly percentage to your current salary.
This information might be too much for some; it is always best to contact your current loan service provider. They will guide you to the best options that are available for you.
But waiting is not in human nature, especially when considering it will take some time to apply for loan forgiveness. The best thing to do is refinance your student loans. This will decrease your repayment term massively.
Another helpful advice piece is when you choose a private lender to refinance your federal loans; you are exempt from forgiveness benefits.
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Teacher Loan Forgiveness
Teachers also have great loan forgiveness benefits they can opt for. For instance, if you are a teacher, you can take advantage of $17,500 for subsidized and unsubsidized loans provided by the Teacher Loan Forgiveness Program.
There are criteria that you must meet before you can qualify for this program. You have to be working as a teacher in a certified school or educational agency full-time for five successive academic years.
Even though Perkins Loan is a government-subsidized program, in order to qualify for it, your university must issue it. Additionally, it is worth mentioning that the program ended in 2017. Don’t give up hope! If you volunteer, teach or work in a government position, your current existing loans can qualify for fractional or even complete loan forgiveness.
State-Sponsored Repayment Assistance Programs
Almost all U.S states propose at least one student loan aid program. And these loans are for careers that are in critical need. Additionally, the State-Sponsored Repayment Assistance Program requires a career choice with high student debt. These careers mostly consist of attorneys and healthcare workers.
There are many ways to qualify for a student loan forgiveness program. Nevertheless, not all of them are ideal. Some have strict criteria, and some require an extensive amount of time before you can qualify for one. Nonetheless, it is always best to take precautions in order to find one that suits your financial situation the best.