Sometimes, it can seem like you’ll never pay off your student loan debt if you have a considerable amount of it. If you’re having trouble paying off your student loans, you might look into student loan forgiveness programs.
While it may take 10-25 years to qualify for federal student loan forgiveness, some programs may be able to help you reduce your monthly payments right away, alleviating financial stress.
In some situations, you may be able to get your student debts forgiven right away, such as if your institution has closed or if you have been fully and permanently disabled.
Let’s find out more.
4 Student Loan Forgiveness Programs To Discharge Your Loans
1. Public Service Loan Forgiveness (PSLF)
Public Service Loan Forgiveness, aimed at debtors who work in the public sector, is one of the most well-known government programs. Your loans will be forgiven tax-free if you qualify. To be considered, you must meet the following requirements:
- Have you considered federal Direct Loans?
- For ten years, work full-time for a nonprofit or government agency.
- Then, make 120 eligible payments on a payback plan based on your income.
While Perkins loans and FFEL aren’t eligible for PSLF, you might be able to qualify if you consolidate them into a Direct Consolidation Loan, that is.
Suppose you can’t afford your monthly student payments under a 10-year standard repayment plan. In that case, you can apply for an Income-Driven Repayment (IDR) Plan to reduce your payments and qualify for loan forgiveness.
Your loan servicer extends your loan payback schedule to 20 or 25 years, and your monthly payment is capped at a proportion of your discretionary income under IDR plans. Therefore, your payments may alter as your income and family size change.
There are four IDR plans to choose from:
- IBR. You’ll typically pay 10% of your discretionary income and have a 20-year loan term.
- ICR. Your loan term is 25 years, and your monthly payment is capped at 20% of your discretionary income or the amount you would pay under a 12-year fixed-payment repayment plan, whichever is less.
- PAYE. Your monthly payment under Pay As You Earn is 10% of your discretionary income, but it will never be more significant than what you would pay under a 10-year regular repayment plan. Your loan will be repaid over 20 years.
- REPAYE. Your loan repayment duration would be 25 years if you took out any of your loans for graduate school. If you borrowed money for an undergraduate degree, you have a 20-year repayment period. Your monthly payment is equal to 10% of your disposable income.
2. Nurses Student Loan Forgiveness
Nurses with student debt have numerous alternatives for loan forgiveness, including Perkins loan cancellation, NURSE Corps Loan Repayment Program, and the Public Service Loan Forgiveness, which pays up to 85% of unpaid college debt for qualified nurses.
Because few borrowers have Perkins loans and the NURSE Corps program is highly competitive, Public Service Loan Forgiveness may be the most likely choice for most nurses.
3. Teacher Student Loan Forgiveness
Teacher Loan Forgiveness may be available if you are a highly qualified teacher working in a low-income school or educational assistance organization.
You may qualify to have up to a maximum of $17,500 of your Direct Unsubsidized and Subsidized Loans forgiven if you teach full-time for five academic years consecutively.
People with a high level of qualification as teachers are those who:
- A bachelor’s degree is required.
- Full certification from the state
- Have not had their licenses or certifications temporarily or provisionally waived because of an emergency
Only science, math, or special education teachers are eligible for the total loan forgiveness of $17,500. However, if you teach a topic other than math or science, you may be eligible for loan forgiveness of up to $5,000 if you are a full-time primary or secondary school teacher.
Once you’ve completed a minimum of five years of service, you can petition for Teacher Loan Forgiveness.
For private student loans, there is no conventional forgiveness procedure. On the other hand, some states grant private student loan forgiveness to persons who work in a high-need industry.
State repayment assistance programs may be available to lawyers, dentists, doctors, veterinarians, and nurses. For example, the state Repayment Program in Michigan allows healthcare providers to receive up to $200,000 in tax-free funds to repay their education loans.
They must pledge to provide healthcare services at charity health clinics in locations where healthcare professionals are in short supply.
Visit your state’s department of education website to see whether your state has a debt repayment aid program for your profession.