Student Loan Discharge Programs
Closed school discharge. You may qualify for loan discharge if your school closes. At the time of closure, you must have been enrolled or have left within 120 days, without receiving a degree. If you qualify, contact your loan servicer to start the application process. Youll need to continue making payments on your loan while your application is being processed. If youre approved, you will no longer have to make loan payments and you may be refunded some or all of the past payments you made on the loan.
Borrower defense to repayment discharge. Borrowers defrauded by their colleges may qualify for debt relief. Youll need to file a borrower defense to repayment claim with the U.S. Department of Education. If you qualify, you may have your loans automatically discharged, at the discretion of the Education Department, if your school was involved in clear, widespread fraud or misrepresentation that affected a broad group of borrowers.
Total and permanent disability discharge for veterans. Veterans who are totally and permanently disabled will have their student loan debt discharged. The process will be automatic unless they decline due to potential state tax liability .
Discharge due to death. If you die, your federal loans will be discharged once a death certificate is submitted to your loan servicer. Your parents PLUS loans used to pay for your schooling will be discharged if the parent who holds the loan or you die.
K Borrowers Receive Student Loan Relief Through Limited Pslf Waiver
The Public Service Loan Forgiveness program allows public servants to discharge the remaining balance of their federal student loans after making payments on their debt for 10 years. In October 2021, the Biden administration overhauled the program to give borrowers credit for past periods of repayment that previously didn’t count, which resulted in $5 billion worth of student loan discharges for 70,000 borrowers.
To qualify for PSLF, borrowers must meet the following eligibility requirements:
- Work full-time for a nonprofit organization or a federal, state, local or tribal government
- Have federal Direct Loans or move other federal loans into a Direct Consolidation Loan
- Make 120 qualifying payments under an income-driven repayment plan
This federal student loan repayment program is available to select teachers, nurses, government employees, military service members,lawyers and law enforcement personnel, as long as they work for a federal agency or in a nonprofit setting. If you believe you qualify, you’ll have to verify detailed information of your employment history through employer certification.
Explore All Your Options For Paying Off Student Loans
Depending on where you live and work, you could qualify for partial or total forgiveness of your student loans. If you arent eligible, look into other options for dealing with your student loans, and check for any new developments or programs.
Even if you started out on a certain plan, you dont have to stick with it forever. Instead, feel free to adjust your plan as your circumstances and goals change over the years.
By exploring all your options, you can find the best student loan solution for you, and move towards a debt-free life.
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How Many Student Loan Borrowers Would Get Total Student Loan Cancellation
Progressives in Congress and President Joe Biden are considering student loan cancellation. . The good news for student loan borrowers is that Biden and progressives in Congress both support wide-scale student loan forgiveness. However, they differ on the amount. . Some in Congress want $50,000 of student loan cancellation, while Biden supports $10,000. Here is how many student loan borrowers would get complete student loan forgiveness for their federal student loans based on the amount of student loan cancellation:
- $10,000 of student loan cancellation: 15.0 million borrowers
- $20,000 of student loan cancellation: 24.1 million borrowers
- $30,000 of student loan cancellation: 30.0 million borrowers
- $40,000 of student loan cancellation: 33.7 million borrowers
- $50,000 of student loan cancellation: 36.1 million borrowers
The Caller Prompts You To Sign A Document To Act On Your Behalf
Some of these phony companies will ask you to sign a document to authorize them to renegotiate your student loan payments.
Theyll even use phrases like well take care of everything, so you dont have to contact your servicer, to make you think this is done as a convenience to you. But in reality, what youre signing is a power of attorney, giving them the right to act on your behalf, legally.
Once they have this document, they can do anything from changing your accounts contact information to consolidating your loans to putting them in forbearance. And, in the worst of cases, they can use this power of attorney to get access to your bank account or other sensitive information.
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How Do You Get Your Student Loans Forgiven
The U.S. Department of Education offers several routes to forgiveness, discharge, or cancellation for federal student loans. In many cases, youll be required to repay a portion of your loans before qualifying for forgiveness of the remaining balance.
To have your student loans forgiven, find out whether you qualify for any of these student loan forgiveness programs.
Consider Student Loan Refinancing
Refinancing gives you the chance to adjust your monthly payments and choose new repayment terms, often between five and 20 years.
You could qualify for a lower interest rate than you have now, thereby saving money on your loans. And if you refinance multiple loans, you can combine them into one single loan to simplify repayment.
Before you shop for student loan refinancing options, note that refinancing federal loans turns them private. As a result, youll lose access to federal forgiveness programs and repayment plans, which proved especially helpful while the coronavirus pandemic squeezed the economy in 2020 and 2021. If youre comfortable with this sacrifice, however, consider refinancing as a way to restructure your debt and potentially save money on interest.
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Can Public Service Loan Forgiveness Be Taxed
Loans forgiven through PSLF cannot be taxed, but the IRS can tax borrowers on other loan forgiveness programs. If you attempt to get your loan forgiven through PSLF but end up benefiting from another forgiveness program, it is important to be vigilant about what those taxes could mean. While loan forgiveness is like getting a check for potentially as much as tens of thousands of dollars, all it does is cancel your debt, so you do not get any cash in your bank account. Yet, you still need to pay taxes on the forgiveness as if it is a lump-sum payment.
As a result, you can work with the IRS to engage in a payment plan for the taxes. You should investigate your repayment options because sometimes the IRS can find you insolvent, meaning that you cannot afford to pay the taxes on the forgiven amount. When this happens, the tax will be reduced or even forgiven. It is best to work with a tax attorney or an accountant on this.
Can You Go To Jail For Not Paying Student Loans
Can You Go to Jail for Not Paying Student Loan Debt? You can’t be arrested or sentenced to time behind bars for not paying student loan debt because student loans are considered “civil” debts. This type of debt includes credit card debt and medical bills, and can’t result in an arrest or jail sentence.
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Student Loan Repayment Options For Lawyers
Going to professional school isnt cheap but there are many loan repayment programs available for lawyers. You may be able to find a local or state assistance program. And some law schools will even help their alumni repay their student loans.
The Department of Justice Attorney Student Loan Repayment Program is a good option for lawyers who want to work at the Department of Justice. If you work there for at least three years, youll receive up to $60,000 in loan forgiveness. You must have at least $10,000 in federal loans to qualify, though thats a pretty low bar for most lawyers to meet.
The John R. Justice Student Loan Repayment Program was designed for lawyers who work in the public sector. For instance, public defenders could earn $10,000 in loan forgiveness a year for a maximum of six years.
Student Loan Forgiveness Scams
Student loan forgiveness is the hottest topic in the student loan industry. It makes sense that scammers will try to make money off of unsuspecting borrowers by offering quick and easy student loan forgiveness.
There are many different ways to qualify for student loan forgiveness based on your situation, your career path, your place of employment and other factors. But, to be clear, none of those student loan forgiveness programs are easy or fast.
Public Service Loan Forgiveness , for example, takes 10 years of qualifying loan payments before you can apply. Other student loan forgiveness options could take between 20 and 25 years. Loan forgiveness is not a quick and easy process. And any business that claims anything otherwise is probably a fraud.
Scammers do their best to make their ads, commercials, videos and websites look as official as possible. Be sure to investigate companies making any of these claims before handing over your money to them.
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Bc Loan Forgiveness Program
Students with specific essential occupations can get their British Columbia student loans forgiven if they agree to work for a publicly-funded facility in one of the provinces under-served areas or with children in an occupation that has a shortage of workers.
Are you struggling to make ends meet? Consider applying for BCs social assistance program.
If eligible, the BC Government will forgive the provincial portion of your Canada-B.C. integrated student loan at a maximum rate of 20% yearly for 5 years. Once you finish 5 years of qualified work, a percentage of your student loan will be forgiven, along with the interest generated during each year youre registered in the program.
Eligibility For The B.C. Loan Forgiveness Program
You can qualify for student loan forgiveness in BC if you:
- Are currently paying off a B.C. student loan
- Have graduated from an accredited post-secondary educational facility
- Are not enrolled in any full-time post-secondary studies
- Work an acceptable amount of in-person hours
- Are or will be employed in an eligible full-time, part-time, on-call and/or casual occupation at a publicly-funded facility and working with children or an under-served community
Eligible Occupations In Under-Served Communities In BC
- Audiologist
- Teacher Educator
- Teach of the Visually Impaired or Deaf/Hard-of-Hearing
Do you live with a disability? Get extra financial aid through BCs disability assistance program.
Scam #: Requesting Personal Details
The U.S. Department of Education will not contact you and ask for personal details such as your SSN, account number, date of birth, FSA ID number and password, address, or account balance. Nor will your student loan servicer or a government-contracted private collection agency. But scammers will.
They might try to fool you by asking you to confirm your information. That could sound like a legitimate request: They need to make sure that theyre actually talking to the borrower, right? If you find yourself in this situation, disengage. Dont worry about being rude. End the interaction immediately. Your financial health could be at stake.
Think about it: If the entity requesting such information was reaching out to you, they would already have this information.
If a letter, email, or phone call youve received seems legitimate but youre not sure, heres how to check:
- Do not call the phone number listed on the letter or send information to the address it provides.
- Dont reply to an email, call a phone number provided in an email, click on any links, or download any attachments.
- Tell a caller youre not available right now and hang up.
Then, contact your student loan servicer directly using the information at the servicers official website. Theyll be able to look up your account and tell you whether the letter, email, or phone call you received was real or fake.
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The Benefits Of Paying For Student Loan Consultations
Theres no magic wand to get rid of student loans quickly. Instead, youll need to think carefully through your options to find the best repayment strategy.
You can go at it alone for free through the Federal Student Aid website, the reality is that figuring out which repayment option is best for you is complicated. If you find yourself feeling over your head with your options, it might make sense for you to invest in one of our one-on-one student loan consultations.
Thats why Student Loan Planner® offers a paid service for advice related to your student loan debt repayment. We wouldnt have a business if the federal government could solve every borrowers debt problems. The reality is if you have six-figure student loan debt, your situation is very different from someone who has $20,000 in student loans.
We dont have the answers to wipe away your debt in one fell swoop. Nor do we claim to provide immediate loan forgiveness. Were also not a document preparation company. We purposely dont fill out any paperwork for clients. The more involved and educated you are in your own repayment decisions, the more focused youll be at eliminating your student loan debt the right way.
You can now better identify student loan forgiveness scams!
Alabama Student Loans And Financial Aid Programs
Alabama has much special financial assistance and student loan programs that will help you pay for college.
These programs make it possible to afford college and allow you to get the education you desire.
Dont forget about Federal student loan programs. You can learn more about Federal student loans.
The specific order in which to pay for college is something we recommend students use. These programs that are specific to Alabama will help you avoid borrowing more money than what you actually need.
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How Many Student Loan Borrowers In Student Loan Default Would Get Complete Student Loan Cancellation
According to the latest student loan debt statistics, approximately 11 millions student loan borrowers are in student loan default, student loan delinquency or student loan forbearance. Based on the total amount of federal student loan forgiveness, this many student loan borrowers would get complete student loan cancellation:
- $10,000 of student loan cancellation: 4.7 million borrowers
- $20,000 of student loan cancellation: 7.2 million borrowers
- $30,000 of student loan cancellation: 8.5 million borrowers
- $40,000 of student loan cancellation: 9.3 million borrowers
- $50,000 of student loan cancellation: 9.8 million borrowers
Protect Yourself From These Three Major Scams
InvestopediaForbes AdvisorThe Motley Fool, CredibleInsider
Student loans can sometimes feel like a scam. Actual student loan companies like Navient, which provide student loans, have been embroiled in lawsuits and allegations from states like Washington, as well as the Consumer Financial Protection Bureau . The worst student loan companies may appear to be scammers, but there are actual student loan forgiveness scams that borrowers may encounter.
When loan holders seek help with some aspect of their loans, like reducing their balance or monthly payment, for exampleor repaying their loans faster, stopping payments temporarily, or getting loans out of delinquent status, student loan scammers may make it difficult for them to get actual help. Here are the worst and most common student loan scams you might encounter and how to identify them so you wont get your money stolen or your credit trashed.
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How Do I Check Which Federal Loans I Have
If borrowers are unsure about what type of loan they have, they can request that information from their loan servicer or they can check on the federal government’s website for financial aid, according to Betsy Mayotte, president of the Institute of Student Loan Advisors.
If you don’t know what kind of federal loans you have, you can see which loans by logging into your account on StudentAid.gov, going to the My Aid page and scrolling down to the Loan Breakdown section.
Can I Negotiate My Student Loan Debt
You can negotiate a student loan payoff, but it depends on the current status of your loans. If your loans are in good standing, lenders won’t consider a settlement request. Adam Minsky, an attorney specializing in student loan law, says you’re eligible for student loan payoff only if your loans are in default.
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Student Loan Scams To Avoid
With little regulation, new student debt relief companies pop up all the time. Theyre often offering relief that seems too good to be true which likely means it is too good to be true.
Student loan scams come in many forms, making different claims for service that sound attractive. Here are some of the more common scams weve come across:
A Guide To Public Service Loan Forgiveness
You may think you know PSLF, but its good to review the basics to make sure you understand whether this program is right for you. Many borrowers apply and make payments in good faith only to learn later that their employment or payments didnt qualify. Even if you qualify, make sure you understand the tax consequences of PSLF.
Law school is more expensive than ever. The increased price has students looking for a variety of ways to pay for law school, but often students have to take out loans. Upon graduating law school, there are many ways to pay back those loans. One option that is often discussed is the Public Service Loan Forgiveness program.
PSLF is a program from the U.S. Department of Education that is administered through Federal Student Aid . If someone works for 10 years full-time in public service employment and makes 120 monthly qualifying payments towards their student loan debt, then the remaining balance is forgiven. PSLF started in 2007, so the first group of borrowers had the opportunity for loan forgiveness starting in 2017. Out of the 726,811 applications for PSLF, only 8,429 have qualified for loan forgiveness. A key factor in why so few borrowers qualify for PSLF is its complicated nature. This article provides an in-depth explanation of what PSLF entails and how to determine if it is the right program for you.
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