Forgiving student loans may seem too good to be true, but there are legitimate ways to get it through free government programs.
These options are only available to borrowers who have federal student loans. Some programs have very specific requirements that make it difficult to qualify, but income-based repayment plans are available to most borrowers.
You are not eligible for federal student loan forgiveness programs if you have private loans, but there are other strategies to manage your private loan debt.
Student loan forgiveness programs
Income based repayment forgiveness. The federal government offers four major income-based repayment plans that allow you to limit loan payments as a percentage of your monthly income. When you sign up for one of these plans, your remaining loan balance will be eligible for forgiveness in 20 or 25 years, depending on the plan. These plans are most advantageous for those who have a large loan balance over their income.
Forgiveness of public service loans. Public service loan forgiveness is available to the government and skilled nonprofit employees with federal student loans. Eligible borrowers may have their outstanding loan remission tax-free after 120 eligible loan payments. In order to benefit from the PSLF, you will need to make payments when signing up for an income-based repayment plan. Otherwise, with a standard repayment plan, the loan will be paid off before you can receive forgiveness.
Teachers loan forgiveness. Teachers who work full time in low-income primary or secondary schools may be eligible for a teacher loan forgiveness for five consecutive years. They can be forgiven up to $ 17,500 in federal direct or Stafford loans. To qualify, teachers must take loans after October 1, 1998.
Student loan forgiveness for nurses. Nurses who take on student debt have several options to forgive their student loan: Public service loan forgiveness, Perkins loan cancellation, and the NURSE Corps Loan Repayment Program, which pays up to 85% of qualified nurses’ outstanding college debt. Forgiveness of public service loans may be the most likely option for most nurses – small borrowers have Perkins loans and the NURSE Corps program is highly competitive.
Obama student loan forgiveness. There is no such thing as “Obama student loan forgiveness”. However, some student “debt relief” companies use it as a generic term for free federal programs – from which they charge borrowers. If you come across a company that offers Obama a student loan forgiveness, “consider it a red flag. Signing up for federal programs such as income repayment and federal student loan consolidation is free through the Department of Education.
There are some additional niches for student loan forgiveness or payment assistance programs that you can qualify for through federal or state programs. Eligibility for these programs depends on your occupation and workplace.
Government sponsored repayment assistance programs. In some states, licensed teachers, nurses, doctors, and lawyers can use programs to help repay their debt. For example, the Mississippi Teacher Loan Repayment Program will pay up to $ 3,000 per year, for a maximum of four years, for undergraduate education loans to teachers with a special tuition license for each school year in a full-time geographic or subject area. Contact your country’s Department of Higher Education to find out if you qualify for the program.
Military student loan forgiveness and assistance. Military personnel in the Army, Navy, Air Force, Land Guard, and Coast Guard are eligible for their loan forgiveness programs. In the Land Guard, for example, qualified soldiers and officers could receive up to $ 50,000 to pay off federal student loans through the Student Loan Repayment Program.
Additional Student Loan Repayment Assistance Programs (LRAP): There may be other government or organization student loan repayment assistance programs offered to public service professions. For example, the National Institutes of Health offers up to $ 35,000 in debt assistance each year to healthcare professionals assigned by the institutes to conduct research. The American Bar Association has a list of national LRAP lawyers.