If you’re one of the millions of Americans with student loan debt, you may be wondering if you’ll qualify for student loan forgiveness under the new administration. Here’s what you need to know.
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The Department of Education has recently released new guidelines on student loan forgiveness. Under the new plan, borrowers who have made 120 qualifying payments on their loans will have the remainder of their debt forgiven. This is a significant change from the previous plan, which required borrowers to make 240 payments before any forgiveness was possible.
The new guidelines are set to go into effect in January of 2022. This means that any borrower who has made at least 120 qualifying payments on their loans by that date will be eligible for forgiveness.
It is important to note that not all borrowers will qualify for forgiveness under the new plan. Borrowers who have not made 120 qualifying payments by the time the program goes into effect will not be eligible for any forgiveness. In addition, borrowers who have private loans or who are enrolled in income-driven repayment plans are not eligible for the program.
If you are a borrower who is hoping to qualify for student loan forgiveness, it is important to make sure you understand the requirements of the new program. You can find more information on the Department of Education’s website or by speaking with a loan counselor.
What is Student Loan Forgiveness?
There are several types of student loan forgiveness, including public service, teaching, and income-driven repayment. Each type of forgiveness has specific requirements that must be met in order to qualify.
Public service loan forgiveness is available to government and nonprofit employees with certain types of loans. To qualify, borrowers must make 120 monthly payments (10 years’ worth) while working full-time for an eligible employer.
Teacher loan forgiveness is available to teachers who teach full-time for five complete and consecutive academic years in a low-income school or educational service agency. Up to $17,500 of certain types of loans can be forgiven.
Income-driven repayment plans can lead to loan forgiveness if you make your payments for 20 or 25 years, depending on the plan. You’ll need to have a remaining balance when your payment period ends in order to qualify for loan forgiveness under an income-driven repayment plan.
The requirements for student loan forgiveness change from time to time, so it’s important to stay up-to-date on the latest information. The Student Loan Forgiveness Calculator can help you estimate how much of your loans may be forgiven under each type of program.
Who Will Qualify in 2022?
The Department of Education has released new data that gives us a better idea of who will qualify for student loan forgiveness in 2022.
According to the data, 36% of borrowers who are enrolled in income-driven repayment plans will have their loans forgiven. This is up from the 29% who were on track to have their loans forgiven under the previous calculation method.
So, what does this mean for you?
If you’re currently enrolled in an income-driven repayment plan and you’re hoping to have your loans forgiven, there’s a good chance you’ll be able to do so. However, it’s important to remember that even if you do qualify for forgiveness, you may still end up owing taxes on the forgiven amount.
If you’re not currently enrolled in an income-driven repayment plan but you’re hoping to qualify for forgiveness, now is the time to enroll. You can do so by visiting StudentLoans.gov or by contacting your loan servicer.
How to Qualify in 2022
There are several ways to qualify for student loan forgiveness, but the most common way is through an income-driven repayment plan.
Income-driven repayment plans are designed to make your monthly student loan payments more affordable. They do this by capping your payments at a certain percentage of your income. If you have any unpaid balance remaining after 20 or 25 years (depending on the plan), the remaining balance is forgiven.
There are four main income-driven repayment plans:
-Revised Pay As You Earn Repayment Plan (REPAYE)
-Pay As You Earn Repayment Plan (PAYE)
-Income-Based Repayment Plan (IBR)
-Income-Contingent Repayment Plan (ICR)
To qualify for student loan forgiveness through an income-driven repayment plan, you must first make sure that your loans are eligible. Only Direct Loans qualify for income-driven repayment plans. If you have FFEL or Perkins Loans, you may be able to consolidate them into a Direct Loan to make them eligible.
You also need to make sure that you have the right type of loans. Only certain types of Direct Loans qualify for income-driven repayment plans:
-Direct Subsidized Loans
-Direct Unsubsidized Loans -Direct PLUS Loans made to students -Direct Consolidation Loans that do not include PLUS loans made to parents
The most important thing to remember is that student loan forgiveness is not automatic. If you want to qualify, you will need to make sure that you are enrolled in an eligible repayment plan and that you are making payments on time. You will also need to meet all of the other eligibility requirements set forth by the program.
If you think that you might qualify for student loan forgiveness, it is important to start planning now. The sooner you start, the better your chances of having your loans forgiven in 2022.