Teacher Loan Forgiveness Programs
Full-time teachers who have taught at least five consecutive academic years, may be eligible for student loan forgiveness of as much as $17,500 through the Teacher Loan Forgiveness Program. The program requires that you teach in certain elementary or secondary schools or educational service agencies serving low-income families, with at least five years of teaching experience under your belt. It restricts the types of federal loans eligible for forgiveness to specific Direct Loans and FFELs . Loan forgiveness amounts vary depending on the circumstances, but to receive the maximum $17,500 amount, you must be a highly qualified full-time math, science or special education teacher and meet certain other requirements.
Some conditions disqualify you from eligibility. For example, you are not eligible if:
- You had an outstanding balance on a Direct Loan or FFEL as of Oct. 1, 1998
- You had an outstanding balance on the date you obtained a Direct Loan or FFEL after Oct. 1, 1998
- You are in default on a subsidized or unsubsidized loan and you have not made satisfactory repayment arrangements
Sidebar: Make sure to look up whether the school where you teach qualifies as a low-income school. Any elementary or secondary school operated by the Bureau of Indian Education or operated on an Indian reservation by an Indian tribal group under contract with the bureau meets the low-income school requirement.
Student Loan Discharge For Unpaid Refund
Like the false certification discharge, unpaid refund discharge applies to direct loans and FFEL program loans. It would come into play if your school didnt pay a refund it owed to the U.S. Department of Education or a lender. In this case, the government will give you a partial discharge in the amount your school didnt pay.
Qualifying for this refund may require a bit of detective work on your part. Contact your school to learn about its refund policies for federal aid, and ask your loan servicer for additional information.
These Programs Can Help You Wipe Out Student Debt
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How can people get rid of their student loan debtand, specifically, when is loan forgiveness an option? We don’t need another statistic to tell us how deep in student loan debt U.S. college graduates are. Total debt and average debt figures don’t mean much, except to say that if the sums you owe keep you up at night, you’re in good company. What really matters is finding a solution.
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What Is Borrower Defense To Repayment
Under federal law, if your college or university misled you or engaged in other misconduct, you may be eligible for borrower defense to student loan repayment. Borrower defense to repayment can result in student loan cancellation of some or all of your federal student loan debt. Borrower defense to repayment doesnt apply to your private student loans.
Federal Scholarships And Grants
The federal government offers many different education grants which do not have to be repaid. Most of these grants require a showing of financial need.
Federal grants include Federal Pell Grants and Teacher Education Assistance for College and Higher Education Grants. You need to submit a Free Application for Federal Student Aid to be considered for federal grants.
Learn more about Federal Scholarships and Grants on Federal Student Aid, an office of the U.S. Department of Education.
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Cfpb College Cost Comparison Calculator
Once you have been accepted by colleges and receive financial aid offers, you can compare the cost of attending different schools with the financial aid and college cost comparison tool provided by the Consumer Financial Protection Bureau . The tool lets you compare the costs of different colleges, including the student loan debt that youll owe when you graduate, and estimates the percentage of your post-graduate monthly salary that will go toward paying off your loans.
Get Student Loan Forgiveness
Wide-scale student loan cancellation isnt the only type of student loan forgiveness. There are multiple programs for student loan forgiveness at both the federal and state levels. . Biden has cancelled student loan debt on a targeted basis, with more student loan cancellation to follow. Learn whether you may qualify for Biden student loan forgiveness. To date, Biden primarily has cancelled student loans for student loan borrowers with a total and permanent disability. Biden also has cancelled student loans for student loan borrowers who were misled by their college or university under the student loan borrower defense to repayment rule. The Public Service Loan Forgiveness program is another option to get student loan forgiveness for federal student loans. If you meet the requirements, you can get your federal student loans cancelled after making 120 monthly payments and working full-time for a qualified pblic service or non-profit employer. While this program has a staggering 98% rejection rate, the Biden administraton is working on ways to grant access to student loan forgiveness to more student loan borrowers. .
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How To Cancel Or Reduce Your Loans
Youll get an email message about your right to cancel or reduce your loans.
Be sure to read the important information below before you complete the form. If you dont want to cancel or reduce a loan, just ignore the message.
You should be sure to reduce or decline your loans through One.IU before they post to your student account. If you get a refund before we receive your loan adjustment request, well let you know how much you need to repay to IU, how to pay, and the deadline by which you need to pay.
If you dont repay the required funds, your request will still be processed . Your student account will then have a balance due. To avoid problems, be sure to pay by the deadline.
Cancel Student Loan Debt Wisely
Before deciding to change the repayment plan, the borrowers must carefully analyze their finances. Another repayment plan targets 10 years to pay out the debt- The Standard Repayment plan. When moving to an Income-driven repayment plan, the monthly amount can increase if the income is high. In this case, it might not be beneficial for such borrowers to move from Standard to Income-driven plans.
Besides, you need to evaluate the pros and cons of the forgiveness options you can access. On the bright side, the PSLF can be accessible to many borrowers working in the public sector. It also covers half-time employees, and the forgiven amount is not tax-deductible. However, as mentioned before, if consolidating loans or having a standard-repayment plan, the PSLF might not be desirable.
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Recent Student Loan Forgiveness Developments
The U.S. Department of Education and the Justice Department are reviewing whether the President has the legal authority to cancel up to $50,000 in federal student loan debt through executive action. There is no timetable on when these reports will be issued. There may be delays because Congress has not yet confirmed key policy advisors in both departments.
The White Houses Domestic Policy Council will consider how student loan forgiveness should be targeted, regardless of whether it is implemented through executive action or legislation.
Borrowers should beware of student loan scams that promise debt forgiveness, in exchange for a fee. When student loan forgiveness is implemented, it will most likely be automatic and free. The U.S. Department of Education will publish an update on the StudentAid.gov web site.
The U.S. Department of Education has recently taken a few steps toward providing student debt relief for which they have clear legal authority:
Will There Be Wide
Last week, a Freedom of Information Act request revealed the apparent existence of a legal memo on student loan forgiveness that the U.S. Department of Education drafted. Some speculate whether this memo reflects the Education Departments long-awaited opinion on whether Biden has legal authority to cancel everyones student loans unilaterally without further congressional authorization. . Secretary of Education Miguel Cardona said the Biden administration is still considering wide-scale student loan forgiveness, implying that student loan cancellation is still alive. That said, theres a low likelihood that Biden will cancel everyones student loan debt. Instead, Biden is more likely to focus on targeted student loan cancellation for specific types of borrowers. So, dont expect wide-scale student loan forgiveness.
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Consider Getting Expert Help
While you get familiar with your options, you probably noticed that each program is unique. They all require different conditions and have their own benefits or disadvantages. It is extremely important to make the right selection from the very beginning. Otherwise, you might end up wasting years for a forgiveness option that you are not even eligible for.
If you want to cancel student loan debt, the best option is to get expert help. Experts, like those in Student Loans Resolved, are well aware of the industry practices. They can analyze the finances and select the most beneficial option for the borrowers. Besides, they will be by your side through the whole application process. Whenever you need help, the debt specialists will be there to lend a hand.
Calculating Total Loan Cost
When you are deciding which loans to accept, be sure to make comparisons based on the loans total cost. The total cost of a loan includes three different amounts: the PRINCIPAL, the INTEREST, and the FEES.
- The principal is the original amount that you borrow.
- The interest is the cost of borrowing money from the lender.
- The interest amount accrues over time. Interest rates on student loans can be fixed or variable.
- A fixed interest rate does not change over the life of the loan.
- A variable interest rate can change over the life of the loan.
To help you understand the total cost of your student loan, private student loan lenders must clearly disclose the loans annual percentage rate, finance charge, amount financed, and total of payments before you sign the loan agreement. These disclosures may look something like this:
|Annual Percentage Rate|
The cost of your credit as a yearly rate.
The dollar amount the credit will cost you.
The amount of credit provided to you.
The amount you will have paid when you have made all scheduled payments.
Note: Your private student loan lender must provide you with loan-cost disclosures at three different points in the application process:
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Cancelling Your Federal Direct Student Loan
If your loan has not yet been disbursed to you, you can cancel it at any time in one of the following ways:
- If your loan is still in an offered status on Athena, you can all or part of the loan online
- If you have already accepted your loan and now wish to cancel all or part of it, visitthis page for instructions on completing a Change in Aid Request to cancel the loan.
If your loan money has already been disbursed, either by crediting the funds to your student account or paying it directly to you, there are two ways to cancel all or part of your loan:
- You can notify Student Accounts Services that you wish to cancel your loan within 14 days of their notification to you that your loan funds have been credited to your account or by the first day of classes, whichever is later. If the loan funds have been used to pay for all of or a portion of your account charges, you must make other arrangements to pay those charges prior to established deadlines.
- Within 120 days of the date UGA disburses your loan money, you may return all or part of the loan to the U.S. Department of Education. Contact your loan servicer for instructions on how to do this.
Other Student Loan Forgiveness And Assistance Options
While there are a number of options for student loan discharge, its still relatively rare for most borrowers. More common are student loan forgiveness and repayment assistance programs.
The government offers forgiveness programs, such as Public Service Loan Forgiveness and Teacher Loan Forgiveness. In exchange for several years of service, you could get the remainder of your loan balance forgiven.
States and universities also offer loan repayment assistance programs, which are typically based on occupation. They often benefit people who work in critical shortage or high-needs areas. Browse student loan repayment assistance programs by state or occupation to see if any apply to you.
Finally, you could also qualify for income-driven repayment plans if youre struggling to keep up with student loan payments. These income-based plans extend your repayment plans and lower your monthly payments.
Adding years to your plan means youll pay more in interest in the long run. But it could be the solution you need to avoid defaulting on your student loans.
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Eligibility Requirements For Cancelling Student Loan Debt
One of the main reasons for failure while applying for forgiveness is wrong documentation and inability to meet eligibility criteria. Therefore, applicants should be cautious about their qualifications. Even if they attempt to meet the required conditions, wrong documentation or lack of documents can be a barrier to cancel student loan debt.
Sure, such great benefit that the PSLF brings is not achieved easily. The borrowers need to focus on many different factors regarding their work conditions, workplace, loan type, etc.
Some of the general eligibility conditions are straightforward to understand. For example, it should be no surprise that the borrowers need to work in the public sector or in a non-profit organization to cancel student loan debt through the PSLF.
However, other conditions need more elaboration. In general, the debtor should serve full-time, own a direct loan and repay it 120 times under a qualifying repayment plan. Besides, the 120 payments have their own eligibility criteria. In the following sections, we will explain more details about these requirements.
The good news is that even debtors with part-time work can apply this forgiveness opportunity. However, in this case, they need to have several half-time positions so that the total of work hours can sum up to a minimum of 30 hours.
4. Qualifying Repayment Plan
School’s False Certification Of Ability To Benefit
If it turns out your school falsely certified your eligibility for your federal student loan and you produce sufficient proof of it, you may be able to cancel your loan obligation if your loan is a Direct Loan or FFEL. This type of false certification often comes into play if you did not have a high school diploma or general equivalency diploma . The school you attended through your student loan gave you an exam to ensure that you could benefit from its program and in giving you the exam, the school did not properly ensure your ability to benefit from the school’s program.
Here are a few examples of a school’s false certification of your ability to benefit:
- Gave you an exam that was not an approved ED test
- Gave you an exam allowing more time than the prescribed time
- Gave you an exam and allowed you to discuss test answers with other students You must adequately prove your school falsely certified your ability to benefit. Providing as much supporting documentation to go along with your application to the ED is critical, so research on your part is highly beneficial.
Consider looking into multiple resources to add to your supporting documentation. State and federal agencies may have reports about problems with your school’s ability-to-benefit exams. Consider these resources:
- Make a specific request for files about your school from the ED through a Freedom of Information Act request
- Search the ED’s Office of Inspector General for its online report
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Federal Loan Forgiveness And Cancellation
You must repay your federal loans. In some situations, however, your loan may qualify for forgiveness if you experience a change in personal circumstances or your school failed to follow lending or administration procedures. A student’s or borrower’s death cancels a federal student loan obligation. The federal government allows discharge or reduction of the amount of your student loan under the following six conditions.
See the MoneyGeek Student Loan Forgiveness & Cancellation at a Glance page for a summary of federal loan forgiveness and cancellation programs.
How To Cancel Student Loans
Student loan cancellation begins with checking your eligibility. Start with the table above. If you have an eligible loan, you also need to be enrolled in an eligible repayment program, as well as meeting the requirements for discharge, forgiveness, or cancellation.
For example, if you plan to apply for PSLF, you need to enroll in a qualifying repayment plan and ensure you do not miss any qualifying payments for the 10-year duration and that your employment is eligible.
Similarly, if your school was closed, you should have all the proper paperwork to prove this before filing for student loan discharge. You can locate your school among other closed institutions on the Department of Educations student aid website.
If you think you might qualify for student loan cancellation, speak with your student loan servicer immediately. It can help you enroll in the correct programs and will provide the forms you need to begin the cancellation process. And do not waitsome programs have a time limit.
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