personal finance

Here's how to get your student loans forgiven — even if Biden's plan falls through


Popular repayment plans lead to forgiveness

After 20 to 25 years of payments, borrowers enrolled in so called income-driven repayment plans get any remainder of their debt cancelled by the federal government.

“Income-driven repayment plans are also student loan forgiveness plans,” Kantrowitz said.

In the meantime, borrowers’ monthly bills are capped at a share of their discretionary income, and some payments wind up being as little as $0. As a result, experts recommend that low-income borrowers explore the options.

Many qualify for Public Service Loan Forgiveness

Andrii Dodonov | Istock | Getty Images

There are typically three primary requirements to qualify for the program, although the recent changes provide some more wiggle room in certain cases:

  1. Your employer must be a government organization at any level, a 501(c)(3) not-for-profit organization or some other type of not-for-profit organization that provides public service.
  2. Your loans must be federal Direct loans.
  3. To reach forgiveness, you need to have made 120 qualifying, on-time payments in an income-driven repayment plan or the standard repayment plan.

The best way to find out if your job qualifies as public service is to fill out a employer certification form.

In 2013, the Consumer Financial Protection Bureau estimated that 1 in 4 American workers could be eligible for the program.

Forgiveness options for teachers, nurses and others

There are many other opportunities for loan forgiveness that often go unknown…

Mark Kantrowitz

higher education expert

Health professionals who commit to at least two years of service in a Native American community can receive as much as $40,000 in student loan assistance through the Indian Health Service Loan Repayment Program.

The John R. Justice Student Loan Repayment Program provides loan assistance of up to $4,000 a year, or as much as $60,000 in total, to state and federal public defenders and state prosecutors who agree to remain employed in those positions for at least three years.

Federal agencies also offer student loan repayment assistance programs, Kantrowitz said. Agencies can make payments to a federal employee of up to $10,000 a year, for a total of $60,000, according to the U.S. Office of Personal Management.

Meanwhile, there are numerous state-level student loan forgiveness programs.

For example, the Get on Your Feet Loan Forgiveness Program in New York offers certain recent graduates who are enrolled in an income-driven repayment plan relief equaling 24 months of payments.

And lawyers in Texas who work for specific legal aid programs may be eligible for the Texas Student Loan Repayment Assistance Program.

“Student loan forgiveness is based on the borrower’s occupation, in most cases,” Kantrowitz said. “So they should look for forgiveness based on their job, especially for their state.”



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