Who Qualifies for Student Loan Forgiveness?

If you’re struggling to repay your student loans, you may be eligible for student loan forgiveness. Learn more about the qualifications for student loan forgiveness and how to apply.

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Loan Forgiveness Basics

The Public Service Loan Forgiveness Program is a federal program that forgives federal student loans for borrowers who are employed full-time (more than 30 hours per week) in an eligible public service or nonprofit job. To qualify, you must make 120 on-time, full-time payments on your Direct Loans after October 1, 2007.

What is loan forgiveness?

Loan forgiveness is when you are no longer responsible for repaying your student loans. There are several ways to qualify for loan forgiveness, but the most common is through public service. If you work in a public or nonprofit job for a certain period of time, you may be eligible to have your loans forgiven.

Loan forgiveness is not automatic, and you will need to apply for it. If you think you may be eligible, contact your loan servicer to find out how to apply.

What are the requirements for loan forgiveness?

To qualify for student loan forgiveness, you must:
-Make 120 qualifying payments on time after Oct. 1, 2007
-Have a Direct Loan or be in the Federal Family Education Loan (FFEL) Program
-Not have an underlying balance of subsidized loans as of Oct. 1, 2007

Student Loan Forgiveness Programs

Currently, there are several student loan forgiveness programs available that can help you get out of debt. If you have federal student loans, you may be eligible for one of the programs offered by the government. These programs are designed to help people who are struggling to make their monthly payments.

Public Service Loan Forgiveness

The Public Service Loan Forgiveness program is a federal program that is available to employees of nonprofit organizations and government agencies. To qualify, you must have made 120 qualifying monthly payments on your student loans while working full-time for a qualifying employer. Qualifying payments can be made under most repayment plans, including income-based repayment plans. If you are not sure if your payments qualify, you can check with your student loan servicer.

After you have made the required number of payments, you must submit an application to have your remaining loan balance forgiven. You can apply for forgiveness after meeting the program’s eligibility requirements—you do not need to wait until you have made your 120th payment.

If you are not employed by a government agency or nonprofit organization, you may still be eligible for forgiveness through the Teacher Loan Forgiveness Program or the Perkins Loan Cancellation and Discharge program.

Teacher Loan Forgiveness

The Teacher Loan Forgiveness Program is intended to encourage individuals to enter and continue in the teaching profession. Under this program, if you teach full-time for five complete and consecutive academic years in a low-income elementary school, secondary school, or educational service agency, you may be eligible for forgiveness of up to $17,500 on your Direct Subsidized and Unsubsidized Loans and your Subsidized and Unsubsidized Federal Stafford Loans.

Perkins Loan Cancellation and Discharge

The Perkins Loan Cancellation and Discharge program allows you to have your Perkins Loans (which are low-interest loans for students with exceptional financial need) forgiven or discharged if you work in certain occupations. To qualify, you must be employed full-time in a public or nonprofit organization, and you must have made 120 on-time, full monthly payments. If you qualify, up to 100% of your loan may be forgiven.

Other Student Loan Forgiveness Options

The Public Service Loan Forgiveness Program is the most well-known student loan forgiveness program, but there are other options available as well. If you are not eligible for the Public Service Loan Forgiveness Program, you may still be eligible for other student loan forgiveness programs.

Income-Driven Repayment Plans

Income-driven repayment plans are based on your income and family size. You’ll pay a percentage of your discretionary income each month, and after 20 or 25 years (depending on the plan), any remaining student loan debt will be forgiven.

There are four income-driven repayment plans:
-Revised Pay As You Earn Repayment Plan (REPAYE Plan)
-Pay As You Earn Repayment Plan (PAYE Plan)
-Income-Based Repayment Plan (IBR Plan)
-Income-Contingent Repayment Plan (ICR Plan)

You’ll need to reapply for an income-driven repayment plan each year, and your monthly payment could go up or down based on changes in your income or family size.

Pay As You Earn Repayment Plan

The Pay As You Earn Repayment Plan is an Income-Driven Repayment (IDR) plan for federal student loans.Like other IDR plans, the monthly payments on a Pay As You Earn plan are generally much lower than they would be under the standard repayment plan because they’re based on your income and family size.

The Pay As You Earn plan is only available to borrowers with certain types of federal student loans who also demonstrate financial need. If you qualify, your payments will generally be 10% of your discretionary income. And, any remaining balance on your loan will be forgiven after 20 years of qualifying repayment (or 25 years if you have any undergraduate loans that weren’t originated under the Pay As You Earn program).

To qualify for the Pay As You Earn plan, you must:
-Have a partial financial hardship
-Have made at least one payment on your eligible federal student loan after October 1, 2007
-Have received a disbursement of a Direct Loan on or after October 1, 2011

Revised Pay As You Earn Repayment Plan

The Revised Pay As You Earn Repayment Plan caps your monthly payments at 10% of your discretionary income.

Forgiveness: After 20 years

You may qualify if you have high debt relative to your income and you took out your first loan on or after October 1, 2007.

You must also have taken out a Direct Loan on or after October 1, 2011.

If you have FFEL or Perkins Loans, you can consolidate them into a Direct Loan to qualify.

Student Loan Forgiveness Scams

If you’re struggling to repay your student loans, you might be looking for ways to get your loans forgiven. Unfortunately, there are many scams out there that promise student loan forgiveness but don’t deliver. In this article, we’ll go over some of the most common student loan forgiveness scams and how to avoid them.

Avoiding Student Loan Forgiveness Scams

There are a few things to watch out for when researching student loan forgiveness programs. First, beware of anyone promising guaranteed student loan forgiveness. There is no such thing as “guaranteed” student loan forgiveness, and if someone is promising otherwise, they’re likely trying to scam you.

Second, be cautious of any company that asks for an upfront fee in exchange for help with your student loans. There are many legitimate companies that offer student loan assistance services, but you should never have to pay a fee upfront. If you do, you could be the victim of a student loan forgiveness scam.

Third, beware of companies that claim they can get your loans forgiven without first performing a thorough analysis of your situation. Only certain types of loans qualify for forgiveness, and there are specific requirements that must be met in order for your loans to be eligible. If a company claims they can get your loans forgiven without first determining whether or not you qualify, they’re likely not being truthful with you.

If you’re considering using a student loan assistance company to help with your student loans, make sure you research the company thoroughly before doing business with them. You can check with the Better Business Bureau or your state’s attorney general’s office to see if there have been any complaints filed against the company. You should also ask around to see if anyone you know has used their services and whether or not they were satisfied with the results.

Remember, there is no such thing as “guaranteed” student loan forgiveness, so don’t let anyone take advantage of you by promising something that isn’t possible. Be cautious when working with any company that asks for upfront fees or makes unrealistic claims about what they can do for you. If you do your homework and choose a reputable company to work with, you can rest assured knowing that you’re in good hands and on your way to getting the help you need to get out of debt.

What to Do If You Have Been Scammed

If you have been scammed, there are a few things you can do:

-Contact your loan servicer: If you have been scammed, your loan servicer can help you figure out what to do. They can also help you apply for forbearance or deferment if you need it.
-File a complaint: You can file a complaint with the Federal Trade Commission (FTC) or the Consumer Financial Protection Bureau (CFPB).
-Report the scammer: You can also report the scammer to the FTC or the CFPB.
-Get help from a lawyer: If you have been scammed and you need legal help, you can find a lawyer through the National Association of Consumer Advocates.

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