Who May Need To Consolidate Their Loans
If you have Federal Family Education Loan Program loans, Federal Perkins Loans or other types of federal student loans that arent direct loans, you must consolidate them into the direct loan program by Oct. 31, 2022, according to Federal Student Aid.
This is important for borrowers because you can’t receive credit for payments if you consolidate after that date. Once the consolidation process is complete, you must then submit a PSLF form to your loan servicer.
The help tool on the Federal Student Aid website will be updated in the coming months to process applications for borrowers in the Federal Family Education Loan Program and those with Perkins loans.
Right now, employment can still be verified for them in Step 1 of the help tool, and loan consolidation can still be requested, Federal Student Aid said on its website. But an application for the Public Service Loan Forgiveness program through the tool may not be available in the near term for those borrowers.
National Health Service Corps
The National Health Service Corps offers tax-free loan repayment assistance to support qualified health care providers who choose to take their skills where theyre most needed.
Licensed health care providers may earn up to $50,000 toward student loans in exchange for a two-year commitment at an NHSC-approved site through the NHSC Loan Repayment Program .
Accepted participants may serve as primary care medical, dental, or mental/behavioral health clinicians and can choose to serve longer for additional loan repayment support.
Priority consideration is given to eligible applicants whose NHSC-approved site has a HPSA score of 26 to 14, in descending order. Eligible applicants may receive up to $50,000 in loan repayment for an initial service commitment until funding is exhausted.
You can learn more about this program here.
What To Do If You Don’t Qualify For Student Loan Forgiveness
Just a fraction of America’s 45 million student loan borrowers have qualified for student loan forgiveness under the Biden administration. While it’s possible to ask the Education Department to reconsider your borrower defense application by mail, you have other options if you don’t qualify for a loan discharge:
- Enroll in an income-driven repayment plan. Depending on the type of federal loans you have, you may be able to limit your student loan payment to 10-20% of your disposable income.
- Apply for additional forbearance. The FSA offers up to 36 months of federal student loan forbearance through unemployment deferment and economic hardship deferment. If you have private student loans, get in touch with the lender to see what kind of forbearance programs they offer.
- Research alternative student loan forgiveness programs. Some of these includethe Public Service Loan Forgiveness program, the Teacher Loan Forgiveness Program, total and permanent disability discharges andclosed school discharges.
- Refinance your private student loans. Borrower defense only covers federal student loans like Direct loans and federal Perkins loans, so you may still be left with private loans even after being approved. Private student loan refinancing can help you lower your monthly payment, pay off your debt faster and save money in interest charges over the life of the loan.
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Student Loan Forgiveness Changes: Who Qualifies And How To Apply Under Bidens Expansion Of Relief
US President Joe Biden on October 5, 2021.
The Biden administration this week announced sweeping changes to Public Service Loan Forgiveness , a key federal student loan forgiveness program that has been mired in problems and low approval rates since its inception.
The administration will be relaxing key requirements that had restricted eligibility for PSLF to only certain types of federal student loans and certain repayment programs. The result will be a significant expansion of the program that could ultimately benefit nearly 600,000 student loan borrowers, according to the Department of Education.
Heres an overview of the new changes to the PSLF program, including who may be eligible and how to request relief.
What Are The Recent Changes To Pslf
The Department of Education is aiming to get nearly 550,000 borrowers closer to student loan forgiveness through an overhaul of the PSLF program. All repayment plans now count for PSLF, whereas previously, you had to repay your loans under an Income-Driven Repayment plan to be eligible for the program. Additionally, you can consolidate previously ineligible loans, like Perkins Loans and FFEL Loans, into a Direct Consolidation Loan to qualify.
Read more about the new PSLF waiver.
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You Have Direct Loans And Youve Already Had Some Pslf Employment Certified
If youve already applied for PSLF and had at least some employment certified, the Department will award any additional payments we can without further action from you. If necessary, Federal Student Aid may contact you to ask you to certify additional months of employment. You should look out for an email from Federal Student Aid in the coming weeks to let you know how many additional payments we have preliminarily determined to be qualifying. You dont need to do anything until you receive an updated payment count or other communication from us.
If you know that you have qualifying employment that you have not yet certified with us, we recommend you certify that employment now by using the PSLF Help Tool at www.StudentAid.gov/pslf.
How To Apply For Student Loan Forgiveness
There are many options for student loan forgiveness and discharge, but each has different eligibility restrictions and a different application process. Learn how to apply for student loan forgiveness.
Borrowers want to know how to apply for student loan forgiveness.
Student loan forgiveness and discharge options include:
- Public Service Loan Forgiveness
- Total and Permanent Disability Discharge
- Death Discharge
- Borrower Defense to Repayment Discharge
- False Certification Discharge
- Discharge after 20 or 25 years in an income-driven repayment plan
Some student loan forgiveness is automatic. Other student loan forgiveness requires the borrower to submit an application form. Application forms can be obtained by contacting the loan servicer or by calling the U.S. Department of Educations Federal Student Aid Information Center at 1-800-4-FED-AID .
There is no fee to apply for loan forgiveness. You do not need to pay anyone for help in applying for loan forgiveness.
The American Rescue Plan Act of 2021 made all student loan forgiveness and student loan discharge tax-free through December 31, 2025. This legislation is likely to be extended or made permanent before it sunsets.
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.
Borrower Defense To Repayment
This is an option that students can use to get their loan forgiven if the school, college, or university misled, defrauded, or violated the state laws. In that case, the student can apply for borrower defense.
If youre approved then the following benefits are given:
- 100% of the loan is forgiven
- If any payments were made theyre reimbursed to you
- There will be no negative effect on your
- If you lost federal student loan aid eligibility then it is reinstated
But if you dont qualify or are approved for the borrower defense then you need to pay all student loans with interest accrued.
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Disability Eligibility May Eliminate Loans
Students unable to work because of total and permanent disability may qualify to have the entirety of their loans forgiven.
The Department of Education defines disability as a physical or mental illness or injury that has been in continuous existence for five years, or is expected to last at least five years or may result in death.
A physician must confirm the impairment and provide the DOE with a completed discharge application, including an explanation of your condition and how it inhibits your ability to work.
If students meet the federal requirements, they may have their federal loans discharged, including Federal Family Education Loans , Direct and Perkins loans. PLUS Loans may be discharged if a parent becomes disabled.
Private student loans do not qualify for a disability discharge.
How Do I Get My Student Loans Forgiven
Before you apply to a loan forgiveness program, be sure your loans are in good standing. Loans that are in default due to missed payments are ineligible to be forgiven.
Qualifying for student loan forgiveness depends on several factors, including:
- What type of loans you have: Each of the programs discussed below is applicable for those who borrowed money using federal student loans. These federal programs are not available for students who took out private loans to pay for education.
- Your employer: While income-driven repayment is open to most borrowers, some jobs, like government, teaching, nursing, doctors, and lawyers, may qualify you for specialized forgiveness programs.
- Your income: Income-driven repayment plan options eventually lead to loan forgiveness and are often beneficial for those with lower income relative to loan debt.
Once you have this information, you can review the available programs to see if theres an option that will enable you to work towards forgiveness. Other considerations such as whether or not you co-signed your student loan can impact you ability for loan forgiveness.
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Why Public Service Loan Forgiveness Is So Unforgiving
Seth Frotman, former student loan ombudsman at the Consumer Financial Protection Bureau, poses at NPR headquarters in September. Frotman and his team reviewed thousands of complaints about the questionable practices of student loan companies. Cameron Pollack/NPRhide caption
Seth Frotman, former student loan ombudsman at the Consumer Financial Protection Bureau, poses at NPR headquarters in September. Frotman and his team reviewed thousands of complaints about the questionable practices of student loan companies.
Update: Many student borrowers have responded to this story by sharing stories of their struggles with PSLF. We’ve curated many of them here.
On the morning of Monday, Aug. 27, Seth Frotman told his two young daughters that he would likely be home early that day and could take them to the playground. They cheered.
He did not tell them why their dad, who often worked long hours as the student loan watchdog at the federal Consumer Financial Protection Bureau, would be free for an afternoon play date.
Frotman assumed that after walking into his office and, at precisely 9:30 a.m., hitting “send” on an incendiary resignation letter to lawmakers accusing the Trump administration of betraying student borrowers, he would promptly be walked out with his things, and his career, in a cardboard box.
Congress created Public Service Loan Forgiveness in 2007, in the waning days of the Bush administration. The pitch to borrowers was simple:
Student Loan Forgiveness Is Not The Same As Forbearance
Forgiveness eliminates your debt forbearance postpones your payments. If you’re having trouble making student loan payments, you can ask your lender for forbearance. Your lender may not give you a forbearance if you don’t meet eligibility requirements, such as being unemployed or having major medical expenses.
Interest on your loan will still accrue, and you can pay that interest during the forbearance period if you want. If you don’t pay it, the accrued interest will be added to your principal balance once your forbearance period is up. Your new monthly payment will be slightly higher as a result, and you’ll pay more interest in the long run.
The only relationship between forbearance and forgiveness is that when you’re in forbearance, since you’re not making payments, you’re not making progress toward the payment requirements of a forgiveness program you might be participating in.
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Usda Veterinary Medicine Loan Repayment Program
This is a program for those who practice veterinary medicine. This program will pay up to $25,000 each year towards qualified educational loans of eligible veterinarians who agree to serve in a NIFA-designated veterinarian shortage situation for a period of three years.
You can find out the timing and learn more information about this program here.
How Long Does It Take For Student Loans To Be Forgiven
If you dont make any student loan payments after 20 or 25 years then the remaining debt is discharged. This depends on when you had taken the first loan. Along with that if youre working in a public sector or for a non-profit employer then you need to take 10 years or 120 months repayments to get your additional loan discharged.
But if youre disabled then you can get the whole loan discharged if you qualify for the opportunity. While in the case of a teacher youre only able to get either $5,000 or $17,500 discharge and need to pay the remaining debt.
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Who Is Eligible For Student Loan Forgiveness
The government previously restricted eligibility for the Public Service Loan Forgiveness program to only certain types of federal student loans and specific repayment plans.
However, through October 2022, borrowers who have made 10 years worth of payments while in a qualifying job such as positions in federal, state or local governments, a nonprofit organization or the U.S. military will now be eligible for loan relief no matter what kind of federal loan or repayment plan they have.
Past loan payments that were previously ineligible will now count, moving some borrowers closer to forgiveness. That is expected to especially help those borrowers with Federal Family Education Loans.
Among other changes, the department will allow military members to count time on active duty toward the 10 years, even if they put a pause on making their payments during that time.
Faculty Loan Repayment Program
The Faculty Loan Repayment Program from the Health Resource and Services Administration helps recruit and retain health professions faculty members by encouraging students to pursue faculty roles in their respective health care fields. This is vital for preparing and supporting the next generation of educators.
You can receive up to $40,000 in student loan repayment, along with extra money to help offset the tax burden of the program.
You can learn more about this program here.
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Student Loan Cancellation: Total And Permanent Disability
Biden has cancelled $5.8 billion of student loans for student loan borrowers with a total and permanent disability. Of the $11.5 billions of student loan forgiveness, this represent the largest amount of student loan cancellation. Biden enacted automatic student loan cancellation for 323,000 student loan borrowers who have a total and permanent disability . This is considered an automatic student loan discharge, and it happened automatically through a data match between the U.S. Social Security Administration and the U.S. Department of Education. To qualify, student loan borrowers who have a total and permanent disability can get their federal student loans cancelled under the Higher Education Act of 1965. Despite this federal law, these student loan borrowers faced several administrative hurdles to get student loan cancellation. Through a change in the rulemaking process which removes the requirement to show proof of income the Education Department will now cancel student loans for disabled student loan borrowers more quickly. To learn more about how you can qualify for student loan cancellation, contact Federal Student Aid.
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Get Targeted Student Loan Cancellation
Biden has cancelled $11.5 billion of student loans since becoming president. This includes $1.5 billion of student loan forgiveness through the borrower defense to repayment rule , $5.8 billion of student loan cancellation for student loan borrowers with a total and permanent disability, and $4.5 billion of student loan forgiveness for student loan borrowers who work for a qualified public service or non-profit employer. You can still qualify for each of these areas of student loan cancellation. While every student loan borrower wont get student loan cancellation, there are still opportunities to qualify.
Special Pslf Changes For Those In The Military
The Department also announced sweeping PSLF changes for military service members. The Biden administration will allow months spent on active duty to count toward PSLF, even if the service members loans were on a deferment or forbearance rather than in active repayment, which is typically a requirement for PSLF. This change ensures that members of the military will not need to focus on their student loans while serving our country.
The Department will also take steps to automate enrollment in PSLF for military service members and federal government employees.
Other Debt Relief Options
If you cant afford your student loans and you do not qualify for a student loan forgiveness program, there are other debt relief options. Consolidate your student loans to make repayment easier by lowering monthly payments. You can also try income-based repayment plans to try and lower interest rates and monthly payments. In extremely rare instances, student loans can be erased through debt settlement or bankruptcy.