Do You Qualify For Student Loan Forgiveness?

The burden of student loans can feel smothering. And not the smothered by puppies kind, but more a giant hairy man holding a semi-truck. With this being the case, people often want to know if they can get any student loan relief.  Let's see what you qualify for!

Something to be aware of, if you are going to be asking for loan forgiveness from the government you can't refinance out of their loans. Keep that in mind before you do any kind of refinancing!

1. Public Service Loan Forgiveness 
This program offers complete loan forgiveness for those who work in the public sector. This could be people working for non-profits, public school teachers or staff, government employees, doctors working in certain non-profit hospitals. Those are just a few examples.

This type of loan forgiveness requires you to make 120 qualifying payments (don't have to be consecutive), so basically 10 years of payments.  You must also be a full time employee and there is no cap on your total dollar amount of forgiveness.

Things to consider!

1. If you choose this route, when you get your payoff it DOES NOT count as income and you won't have to pay taxes on it.
2. In the meantime you may be able to reduce the amount you actually pay by reducing your overall income but maxing out things like a 401k, 403b, or a Health Savings Account.

If you think this is something you qualify for and want more information this link will take you to the official government site. 

2. Teacher Loan Forgiveness Plan
This program is designed for highly effective teachers who teach full time for five complete and consecutive academic years in a low income school.

With this forgiveness plan you'll be eligible for up to $17,500 if you teach math, science, or special education or $5,000 if you teach in other areas.

Things to consider.

1. Their definition for a teacher is a person who provides direct classroom teaching, or classroom-type teaching in a nonclassroom setting. Special education teachers are considered teachers. 
2. If this is something you are going to try and get you should make sure you work in a Title 1 school.
3. If you choose this route, when you get your payoff it DOES NOT count as income and you won't have to pay taxes on it. 

​This is the one the I used and got the full $17,500.

If you think this is something you qualify for and want more information this link will take you to the official government site.

3.  Income Based Repayment
This is the first of four main income-drive repayment plans and allows you to cap your loan payment at a percentage of you monthly income, typically capped at 10% to 15%. Your loans will be fully forgiven after 20 or 25 years depending on your plan.

To be eligible, your payment must be less than what you would pay under the Standard Repayment with a 10-year repayment period. 

Things to consider

1. This may be best for someone with a lot of student loan debt and a lower paying income.
2. Under current tax law, this type of forgiveness would be taxed as income. Keep that in mind that you may have a larger tax bill later on. 

​​If you think this is something you qualify for and want more information this link will take you to the official government site.

4. Income Contingent Repayment
This is the second option for income driven repayment and also adjusts your monthly payment based of your income. You’ll either pay 20% of your discretionary income or what you’d pay on a fixed 12-year plan, whichever is less.

This plan may not lower your payments as much as others, it is the only income-driven plan available to borrowers with Parent PLUS loans. 

Things to consider

1. If you have a Parent Plus Loan, you can apply for ICR but you have to consolidate them first. 
2. After 25 years of on-time payments, you’ll get the rest of your loan balance forgiven
3. Under current tax law, this type of forgiveness would be taxed as income. Keep that in mind that you may have a larger tax bill later on. 

​​If you think this is something you qualify for and want more information this link will take you to the official government site.

5. Pay As You Earn
This is the third option for an income driven plan and is similar to Income-Based Repayment. The difference is you may be eligible for forgiveness after a certain period of time. 

The PAYE program caps your monthly payment at 10% of your income. After the borrowers make payments for 20 years, any remaining balance becomes eligible for forgiveness.

To be eligible, your payment must be less than what you would pay under the Standard Repayment with a 10-year repayment period. 

Things to consider

1. ​As with income based repayment, your forgiven balance might be treated as taxable income.

​​If you think this is something you qualify for and want more information this link will take you to the official government site.

6. Revised Pay As You Earn
This is the last income driven repayment option and works similarly to Pay As You Earn. Your payments are capped at 10% of your discretionary income. Undergraduate loans are forgiven after 20 years while Graduate school loans are forgiven after 25 years.

There is no income eligibility requirement and anyone with eligible loans can apply.

Things to consider

1. You could end up with a higher payment if your income begins to increase.

​​If you think this is something you qualify for and want more information this link will take you to the official government site.

This clearly has nothing to do with student loans but the topic is depressing and this is a nice picture..

​​7. Student Loan Forgiveness For Nurses
Nurses with student debt have several options for forgiveness, like the Public Service Loan Forgiveness, Perkins loan cancellation, and the NURSE Corps Loan Repayment Program, which pays up to 85% of a qualified nurses’ unpaid college debt, if you haven't served in the military there is also an option of joining to get relief, or some states even offer forgiveness programs.

Things to consider

1. The Public Service Loan Forgiveness may be the most likely option, not a lot of people have Perkins loans, and the NURSE Corps program is highly competitive.
2. At the time of this posting the Nurse Corps is not taking application but you can join their email list for them to notify you when they are.

If you think this is something you qualify for and want more information this link will take you to the official government site. 

8. Obama Student Loan Forgiveness
Be aware that there is no “Obama student loan forgiveness.” Some companies use it as a shady  way to catch your attention and charge you to enroll. If you see a company offering the "Obama Student Loan Forgiveness" think of it as an instant red flag! Enrolling in federal programs like income-based repayment and federal student loan consolidation is free to do on your own through the Department of Education.

9. Student loan repayment assistance programs for other careers. 
Some states have program to offer assistance to professionals in exchange for two years of service. The most common jobs are doctors, nurses, teachers, and lawyers, but some others may qualify.

Check your state’s offerings to find out if it has a loan repayment assistance program for you.

10. Military Student Loan Forgiveness and Assistance
The Army, Navy, Air Force and National Guard all offer loan repayment assistance programs and not just for Army and Navy doctors, but it also helps armed forces members and veterans. 

There are things like the Army’s College Loan Repayment Program, which pays one-third of your loans every year for three years. In total, you could get up to $65,000 in aid. Another option is the Navy program also awards up to $65,000, or the National Guard contributes up to $50,000.
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There are plenty of programs for military student loan forgiveness so make sure you know what you qualify for.

Student loan discharge for special circumstances. 
This isn't loan forgiveness but would be just as awesome if it happened. In rare cases borrowers can get their student loans completely canceled.

There are seven situations when you could qualify for student loan discharge:

• Closed school discharge
• Student loan discharge in bankruptcy
• Loan cancellation for total and permanent disability
• Discharge for false certification or unauthorized payment
• Unpaid refund discharge
• Borrower defense discharge
• Student loan discharge due to death

If you think you could qualify or want to learn more, speak with your loan servicer.

Cancellation
There is also one circumstance when you may be able to get cancellation.
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Perkins Loan Cancellation - Borrowers with federal Perkins loans can have up to 100% of their loans canceled if they work in a public service job for five years. In many cases, approved borrowers will see a percentage of their loans discharged incrementally for each year worked. The Perkins loan teacher benefit is for teachers who work full time in a low-income public school or who teach qualifying subjects, such as special education, math, science or a foreign language.


Hopefully you can find something that can work for you to get some help because student loans are the worst!