Student Loan Forgiveness: How To Get Rid of Your Debt
The Biden administration announced on Aug. 24 a formal plan to forgive up to $20K in federal student loans, affecting millions of borrowers as they awaited a student loan moratorium set to end on Aug. 31, 2022. That deadline has also now been extended to the end of the year.
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However, even with the recent debt forgiveness news, there are also other ways to get your loans forgiven through government programs. You’ll need to meet specific eligibility requirements to qualify, but if you do, you can have all or part of your loan forgiven. Here are some loan forgiveness options outlined by the Studentaid.gov website.
Teacher Loan Forgiveness
This option is available to those who teach full-time for five complete and consecutive academic years in certain elementary or secondary schools, or work at educational service agencies that serve low-income families. If you qualify, you might be eligible for forgiveness of up to a combined total of $17,500 on eligible federal student loans.
Public Service Loan Forgiveness (PSLF)
If you work full-time for a government or not-for-profit organization, you might qualify for forgiveness of the entire remaining balance of your Direct Loans after you’ve made 120 qualifying payments, or 10 years’ worth. To benefit from PSLF, Studentaid.gov says you should repay your federal student loans under an income-driven repayment plan. You can learn more about PSLF by calling 855-265-4038.
Note that if you’ve been denied loan forgiveness under PSLF because one or all of the payments you made on your Direct Loans were under a nonqualifying repayment plan, you might be eligible for Temporary Expanded Public Service Loan Forgiveness.
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Income-Driven Repayment (IDR) Plan
Borrowers who repay their loans under an IDR plan can have remaining balances forgiven after making a certain number of payments over a certain period of time.
In addition to the above forgiveness options, you can also get benefits such as reduced interest rates and financial awards to help you pay down student debt if you have served in the U.S. military or AmeriCorps.
If you don’t qualify for forgiveness, you might still be able to lower the amount of student debt you owe. You’ll need to contact your loan servicer to see if you can do the following:
- Switch your repayment plan to lower your monthly payments
- Consolidate multiple federal loans into one loan, which could result in a lower monthly payment
- Apply for deferment or forbearance to temporarily postpone or reduce your payments
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