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Do You Qualify For Student Loan Forgiveness?

Julian Dossett
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For most of us, paying off student loans takes years. 

COVID-19 has made everyday expenses tough, let alone debt.

If you’re worrying about student loans, you may qualify for student loan forgiveness. Student loan forgiveness allows borrowers to pay back less than or none of the amount they owe.

There are many programs, but most are for people who borrowed from the federal government.

Most people who took out private loans usually can’t quality for federal forgiveness, but there are exceptions.

Today, we’re going to help you figure out if you qualify for student loan forgiveness.

Recent news

In response to COVID-19, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion relief package. 

The CARES Act also suspended principal and interest payments on federally held student loans through Sept. 30, 2020. 

A federally held loan is a loan owned by the federal government. 

That means anyone who has federal student loans doesn’t have to make payments until October 1. 

Interest on student loans has also been suspended. So the loan won’t grow between now and October. 

Student loan forgiveness programs

The CARES Act has suspended federal student loans, but there are a number of programs that can erase student loans or decrease the amount owed.

There are ten main student loan forgiveness programs. Today, we’ll go over each of them.

There are some differences to know.

If loan payments are no longer required due to your job, then it’s called forgiveness or cancellation. 

If loan payments are no longer required due to other circumstances besides employment, such as disability, then it’s called discharge. 

All three terms mean you don’t have to pay back the entire amount of the loan. 

Here are the ten types of student loan forgiveness:

1. Government or non-profit workers
People who are employed by the government or a non-profit may qualify for Public Service Loan Forgiveness.

People with direct loans qualify for this program. Applicants must make 120 monthly payments on the loan before applying.

2. Full-time teachers
People who teach at low-income schools or educational service agencies may qualify for Teacher Loan Forgiveness.

This program offers forgiveness up to $17,500 on Direct Loans or FFEL Program loans.

3. Students at a closed school
If your school closes while you’re enrolled or soon after graduation, then you might qualify for Closed School Discharge

This program is available for Direct Loans, FFEL Program loans, and Perkins Loans.

4. People with Perkins Loans

People with Perkins Loans could qualify for the cancellation of some or all of the loan, depending on their employment and volunteer service.

This program includes Perkins Loan Teacher Cancellation.

5. People living with permanent disabilities

People who are totally and permanently disabled may qualify for total and permanent disability discharge.

This program is available for people with Direct Loans, FFEL Program loans, and Perkins Loans.

6. Death
Federal student loans will be discharged for people who have passed away. The Discharge Due to Death program is available for Direct Loans, FFEL Program loans, and Perkins Loans.

7. Bankruptcy
In rare cases, people who file for bankruptcy may have their federal student loans discharged. 

Forgiveness is not automatic in bankruptcy, and needs to be followed up on. Direct Loans, FFEL Program loans, and Perkins Loans could qualify for this program.

8. Student at fraudulent school
If you went to a school that failed to deliver on a promise related to your student loans, then you may be eligible for Borrower Defense to Repayment

This program is available to people with Direct Loans.

9. Students falsely certified for loans

If your school falsely certified your eligibility for a student loan when you shouldn’t have been approved, then you could qualify for False Certification Discharge. People with Direct Loans and FFEL Program loans can apply for this program.

10. Students with unpaid loan refunds
If your school failed to return the required loan funds to the loan servicer, then you might be eligible for a portion of your loan to be forgiven with Unpaid Refund Discharge. If you have Direct Loans and FFEL Program loans you can apply. 

Tips for paying off student loans

Student loan forgiveness is famously tough to qualify for. Any of the forgiveness programs will take time and effort. 

Here are a few tips for paying off student loans the old-fashioned way:

Plan a budget
Budget your monthly expenses to ensure you have enough money left to make student loan payments on time. Budgeting requires careful spending and foresight, but it’s a great way to get ahead. 

Make early payments
Many student loans can be paid back early with no penalty. Because loans build up interest that also needs to be paid back, making early payments means that the overall amount you pay will be less. 

Pay down interest
Student loan repayment is generally put on hold while the student is in school, as well as for a grace period after graduation. Unless the loan is federally subsidized, it will grow interest during this time. Even though payment is not required, some students choose to start paying off the loan’s interest early. 

If your student loans are becoming unbearable, there are a number of programs that can help. But keep in mind that these programs have lots of requirements, and they take time to work. 

Even if you don’t qualify for any of the forgiveness programs, student loans can still be paid off through careful budgeting and staying on top of it. These things take time. You can do it.

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