How To Get Student Loan Forgiveness In 2024

Around 4.75 million borrowers have received $167 billion worth of federal student loan forgiveness. Check your loan types, consider available programs and then run the mathematics to see if it is good idea for you to pursue forgiveness.

It is of no doubt that the student loan forgiveness has a mixed track record. Last summer, the supreme court struck down a wide plan that would have erased up to $20,000 per borrower. Still, student loan forgiveness is till far more accessible than ever before.

There are several existing federal student loans forgiveness programs that have erased $167 billion in student debt for 4.75 million borrowers as of May 22, according to the Education Department, with more to come this year.

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What is Student Loan Forgiveness?

Student loan forgiveness refers to programs that allow borrowers to have a portion or all of their federal student loan debt cancelled. It's a complex topic, with various programs and eligibility requirements.

Check Your Eligibility to Student Forgiveness Loans

Before being able to qualify for forgiveness, you must have federal student loans since Private student loans are not eligible.

In order to check if you have Federal loans, go to StudentAid.gov, and then try to log in or recover your account.

From here now, check which types of federal student loans you have. If you have certain types of loans, like commercially held FFELP or Perkins loans, you may have to consolidate them before going after forgiveness.

Income-Driven Repayment

The recently introduced Income-Driven Repayment (IDR) plan, known as Saving on a valuable Education (SAVE), offers the most straightforward route to student loan forgiveness. This plan is available to all borrowers who have federal direct loans

Under the SAVE plan, if your initial loan balance as $12,000 or less, you could have your remaining debt forgiven in as few as 10 years. For other borrowers, forgiveness may take up to 20 to 25 years. While you are working towards forgiveness, your monthly payments could be significantly reduced.

If your individual income is below $32,800 or your family of four earns less than $67,500, you might qualify for $0 monthly payments. For those with higher incomes, monthly payments are limited to between 5% and 10% of your earnings.

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Public Service Loan Forgiveness

In case you are working for a qualifying government or nonprofit employer, you could be eligible for Public Service Loan Forgiveness (PSLF). This program erases your remaining balance after a decade of repayment.

"Generally, the PSLF program is the best one if you have access to it", says Scott Stark, a financial coach and certified financial planner at Financial Finesse, a workplace financial wellness company.

IDR Account Adjustment

If you are a long time borrower who has been in repayment for at least 20 or 25 years, you could get automatic loan forgiveness by September 2024.

This is actually the result of a one-time program known as the IDR account adjustment. The adjustment is actually automatic for most borrowers, but if you have certain loan types, you must consolidate them before a certain date in order to be eligible.

Other Loan Forgiveness Programs To Consider

Aside from the IDR and PSLF, your student loan forgiveness options may include:

• Teacher Loan Forgiveness: In case you work in a qualifying low-income school
• Perkins Loan Cancellation: If you have perkins loans and work in public service
• Borrower Defense to Repayment: If you think your school defrauded you
• Closed School Discharge: If your school closed during or shortly after your time there.
• State Based Student Loan Payment Assistance: If you work in a healthcare or are willing to relocate to a new area.

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How to Apply For Student Loan Forgiveness

To begin the process of potentially qualifying for federal student loan forgiveness, it's advisable to start by reaching out to your loan servicer. This communication will help you gain clarity on the specific types of federal student loans in your portfolio and determine if consolidation is necessary. Additionally, it's wise to collect and organize the following relevant documents, keeping them easily accessible:

• A verified FSA ID – this is the account username and password that allows students (and parents) to identify themselves electronically to access US Department of Education systems.
• Your financial information
• Your personal information
• Your spouse’s information (if applicable)

Conclusion: How to Get a Student Loan Forgiveness

Navigating student loan forgiveness can be complex, but the potential benefits make it worthwhile to explore your options. Whether through public service, income-driven repayment plans, or profession-specific programs, there are numerous paths to alleviating your student loan burden.

Remember to thoroughly research each option, stay proactive in managing your loans, and don't hesitate to seek assistance from your loan servicer or a financial advisor. With persistence and the right strategy, you can work towards a future free from student loan debt.