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Student Loan Forgiveness
Americans are currently carrying over $1.6 trillion in student loan debt these days, and most students graduating from college enter the workforce with an average of $29,200 in outstanding student loans.
Living with all of that debt can be difficult, especially if you don’t land a great job right away, or if you have family and other expenses to contend with.
One of the best ways to deal with student loan debt is to get rid of it altogether, via student loan forgiveness. There are many student loan forgiveness programs that can erase all of your outstanding student loan debt.
Each program is different, with its own requirements, advantages, and drawbacks. Here is what you need to know about dealing with student debt right now.
What is Student Loan Forgiveness?
There are several terms that deal with the reduction or elimination of student loan debt. The three most common words used are forgiveness, cancellation, and discharge.
If you enter a job or program where you no longer have to make further payments on part or all of your student loan, this is generally referred to as student loan forgiveness or cancellation.
On the other hand, student loan discharge generally refers to when a borrower is released from the contract to repay a student loan due to exceptional circumstances, such as a debilitating permanent injury or the closure of a school.
There are several different types of student loan forgiveness. Let’s look at some of the most common programs you may be eligible for.
Public Service Loan Forgiveness (PSLF) Program
If you desire to have a career in public service by working at the Federal, state, or local government, you may be eligible for some form of public student loan forgiveness (PSLF).
Working in tribal governments and nonprofit organizations may qualify you for student public service loan forgiveness as well.
Generally, once you’re employed full-time by one of the designated public service organizations and have made 120 qualifying payments on your student debt, you can apply for student loan forgiveness. If your application is approved, this program will forgive the balance on your direct loans.
This program is a great opportunity if you work in the public service sector and are carrying high levels of student loan debt. However, in most cases, you cannot accelerate the qualifying payments process, so you will not be eligible for PSLF until after working in government or a nonprofit for at least ten years.
The one exception to this period is for people who participate in the AmeriCorps national service program; AmeriCorps participants can have their time in that program counted towards their qualifying payment period.
So, if you weren’t in AmeriCorps and wish to achieve student loan forgiveness more quickly, you may need to consider other options.
Student Loan Forgiveness for Nurses
People who enter the nursing field may be qualified for a variety of student loan forgiveness programs.
Any nurse who works in the public service sector may be eligible for the PSLF program described earlier. Additionally, Nurses who received a student loan under the Perkins Program, which ended in 2017, may be eligible for complete student loan forgiveness after five years of full-time qualifying service.
The National Health Resources & Services Administration’s Nurse Corps Repayment Program will also pay back up to 85 percent of a qualifying nurse’s student loans in exchange for working in a designated healthcare facility facing critical nursing shortages. There are often loan forgiveness programs for eligible nurses at the state level and for serving in the military as well.
Student Loan Forgiveness for Teachers
If you plan to be a teacher, there are also opportunities for loan forgiveness in this career field as well. Teachers who opt to work in designated low-income schools or education service agencies can qualify for student loan forgiveness.
Teachers who meet this requirement and teach in these types of education settings for five consecutive years can have up to $17,500 of their student loans forgiven.
There are additional requirements to be eligible for this program. For example, you must have received your student loan or loans before the start of the five-year period, and you have to provide additional documentation attesting to your qualifications as an elementary or middle school teacher.
However, if you’re a teacher and believe you meet this program’s eligibility requirements, it could provide a great opportunity to erase a great deal of your student loan debt.
Total and Permanent Disability (TPD)
If you are injured or become ill and receive a total and permanent disability, you can be eligible for a discharge of the remaining debt you owe on most student loans.
You have to apply for this program and the main documentation you have to provide for eligibility is proof of your total disability.
If you’re a veteran with military service, you can use the disability documentation they receive from the Veteran’s Administration following their retirement or discharge from the military.
Applicants who are receiving Social Security Disability Insurance or Supplemental Security Income can use their documentation from the Social Security Administration to qualify for this program.
Finally, a physician who is licensed to practice in the United States can certify that you are totally and permanently disabled as well.
After you apply for a total and permanent discharge (TPD), you do not have to make any further student loan payments to Nelnet while the application is pending.
If it is approved, you will enter a three-year monitoring period where, as long as you continue to meet the eligibility requirements of the TPD program, your student loan repayment requirements will remain suspended.
If you fail to meet these requirements – based on an increase in income, a change in your disability status or you obtain an additional student loan – your original student loan obligation will be reinstated.
However, following that three-year monitoring period, the loan will become permanently discharged.
Beyond the programs discussed so far, many states have programs that are worth exploring.
For example, New York’s NYS Get on Your Feet Student Loan Forgiveness Program provides up to 24 months of student loan relief for residents of the state who are in a federal income-driven repayment plan.
In California, the State Loan Repayment Program (SLRP) provides student loan forgiveness for eligible healthcare professionals who agree to work in underserved areas.
In Texas, the Texas Student Loan Repayment Assistance Program will forgive up to $4,800 of student loan debt annually to qualifying Texas residents serving in a Texas legal aid program.
There are many unique programs like these in nearly every state. As you attempt to deal with your student loan debt, you should check to see if your state has any forgiveness or relief programs available.
Parting Thoughts: Seek Student Loan Forgiveness Today
Dealing with high levels of debt can be difficult as you are starting your professional life. If you don’t want to be held back by a crushing load of student loan debt, you may not have to be. You can check out some of the options described in this article, or research your opportunities, and find a program that offers student loan forgiveness today.
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