student loan forgiveness relief programs can help resolve your student loan debt problems.
Your financial situation is different from someone else. The student loan forgiveness relief service that works for someone may not be the best choice for someone else. You should take the time to understand all the debt relief options available to you to find the best solution for your needs and goals.
Student Loan Forgiveness Guide Locator
What Is Student Loan Forgiveness Relief?
Student loan forgiveness is a process that eliminates a portion of your educational loan debt without penalties. This means you are no longer obligated to make your loan payments. The Federal government offers various student loan forgiveness programs, where you qualify based on your profession or government service. Each program has their specific requirements to be eligible for this benefit. Once you are eligible for one of these forgiveness programs, the servicer of your student loan discharges the balance that you owe on the loan. It is treated as your having paid off the loan balance as required. Depending on your circumstances, you may be required to pay taxes on the amount forgiven.
Why Student Loan Forgiveness?
The Federal government offers a variety of federal student loan forgiveness programs as a means of job recruitment and employee retention. This is to to encourage students to enter relatively low-paying careers like firefighting, teaching, government, nursing, public interest law and the military. Also, is an acknowledgement by the federal government that for many, the salary you earn after earning your degree does not match the educational expenses you incurred in the process. Given that so many adults are burdened with high student loan debt, the federal government forgiveness programs serve as an indirect form of educational subsidy.
You must repay your loans even if you don’t complete your education, cannot find a job related to your program of study, or are unhappy with the education you paid for with your loan. The list below is a quick view of the types of forgiveness, cancellation, and discharge available for the different types of federal student loans.
Public Service | Teacher
Loan Forgiveness | Cancellation | Discharges
The terms forgiveness, cancellation, and discharge mean the same thing, but they are used in different ways. If you are no longer required to make payments on your school loans due to your job, this is generally called forgiveness or cancellation. If you are no longer required to make payments on your school loans due to other circumstances, such as a total and permanent disability or the closure of the school where you received your loans, this is generally called discharge.
If you have private student loans, there are no ways to get student loan forgiveness. The best bet is to consider refinancing your private student loan to lower your interest rate or change your payment terms to hopefully make your loan more affordable.
Remember, your student loan is technically an unsecured deb as no collateral was pledged to the lender to secure the loan. The only “guarantee of payment” you made to the lender was the promise of repayment from your future earnings. However, unlike other types of unsecured debt, like your credit cards or a personal loan, student loans (federal or private) are excluded, with very few exceptions, from being discharged in a personal bankruptcy judgement.
FSLR | TPD
Should You Switch to An IDR Plan?
The Standard Repayment Plan is the most popular plan for federal student and parent loans. It is a level payment plan, with up to 120 fixed monthly payments during a repayment term of up to 10 years.
An Income Derived Repayment (IDR) plan for federal student loans is different. Instead of setting monthly payments according to your student loan balance, the amount due is relative to your income. It is intended to make your payments affordable while taking income and family size into account.
The term of IDR student loans is 20 – 25 years, rather than the Standard Repayment Plan of 10 years. When combined with one of the various student loan forgiveness plans, you have the potential to have the remainder of the IDR loan forgiven after 10 years. This is a significant reduction in your student debt, regardless of whether you are obligated to pay taxes on the debt forgiven.
Bankruptcy | Closed School
Fed Student Loan Forgiveness Summary
Type of Forgiveness, Cancellation, or Discharge
Federal Family Education Loan (FFEL) Program Loans
|Public Service Loan Forgiveness||X||X||X|
|Teacher Loan Forgiveness||X||X|
|Perkins Loan Cancellation (includes Teacher Cancellation)||X|
|Total and Permanent Disability Discharge||X||X||X|
|Bankruptcy Discharge (in rare cases)||X||X||X|
|Closed School Discharge||X||X||X|
|False Certification of Student Eligibility or Unauthorized Signature/Unauthorized Payment Discharge||X||X|
|Unpaid Refund Discharge||X||X|
*FFEL Program loans and Perkins Loans may become eligible for Public Service Loan Forgiveness if they are consolidated into the Direct Loan Program.
Explore All Options
Depending on where you live and work, you could qualify for partial or total forgiveness of your student loans. If you aren’t eligible, look into other debt relief options for dealing with your student loans.
Even if you started out on a certain Federal student loan plan, you don’t have to stick with it forever. Instead, feel free to adjust your plan as your circumstances and goals change over the years.
When in doubt, contact your student loan servicer to move forward with your life.