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What Is The Student Loan Forgiveness Act

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Things To Consider When Applying For Student Loan Forgiveness

What is Student Loan Forgiveness

Student loan forgiveness programs can help you save money on student loan repayment in the long run, but there are some pitfalls to watch out for. Here are several factors to consider before pursuing one of these programs.

  • Scams are out there. Nearly every industry has its share of scammers, and the student loan industry is no exception. Watch out for debt relief companies that promise to make your loans disappear. They cant do anything that you wouldnt be able to do on your own, but they will charge you money anyway.
  • Forgiveness typically does not apply to private student loans. Most forgiveness programs are for student loans backed by the federal government. If you have mostly private student loans, forgiveness programs may be harder to find.
  • Some forgiveness programs take a decade or longer to complete. Consider whether participating in a forgiveness program is worth it in the long run with some programs, youll need to make payments for 10 to 25 years. If you have a good income, you might be better off paying off your loans as quickly as possible on your own.
  • Student loan forgiveness is not an option if you have already defaulted on your loans. Once you default on your loans, you lose all federal protections and benefits.

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.

Likely Future Student Loan Forgiveness Developments

The next event will occur when the U.S. Department of Education and Justice Department issue reports concerning the executive branchs legal authority to implement broad loan forgiveness without Congress.

These reports will likely conclude that the President does not have the legal authority to implement broad student loan forgiveness through executive action. This will force Congress to act. Congress might consider legislation to forgive student loans in the fall, as part of a budget reconciliation bill.

The timing of loan forgiveness will also depend on which loans are eligible.

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Biden Is Focused On Targeted Student Loan Cancellation

As president, Biden has cancelled $11.5 billion of student loans. This week, the U.S. Department of Education announced $2 billion of student loans will be cancelled within weeks. Biden has enacted major changes to student loan forgiveness, which will ensure that more student loan borrowers get access to student loan relief. Expect more student loan forgiveness, but it will continue to be targeted to specific borrowers . .

Who May Need To Consolidate Their Loans

Dont plan on student loan forgiveness, law students

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.

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What Are Some Legitimate Options For Student Loan Forgiveness

No, Obamas Student Loan Forgiveness Act never passed. However, there are several real options for having federal student loans forgiven.

In fact, in response to the coronavirus epidemic, the CARES Act suspended federal student loan interest and payment suspension through September 2020.

The pending HEROES Act proposed $10,000 each of federal student loan AND private student loans forgiveness initially but may have more stringent eligibility requirements if passed by the Senate. While its definitely something to keep an eye on, here are some existing programs that may be helpful.

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.

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These Student Loans Are Excluded From Bidens Loan Forgiveness And Relief Programs Heres Why

    WASHINGTON, DC – AUGUST 22: President Joe Biden talks to reporters during an update on the situation … in Afghanistan and the effects of Tropical Storm Henri in the Roosevelt Room on August 22, 2021 in Washington, DC.

    The Biden administration has enacted billions of dollars in student loan forgiveness, cancellation, and other relief during the course of the last several months. But one particular type of student loan has been consistently left out: private student loans.

    Additional Student Loan Relief From Coronavirus Pandemic Legislation

    $10,000 Student Loan Forgiveness Update – HEROES ACT BILL (Need to Know!)

    In light of the coronavirus pandemic, and the effects that it had and continues to have on the U.S. economy, the federal government has enacted several forms of relief from student loan debt.

    Starting March 13, 2020 and effective through September 30, 2021, federal student loan borrowers were automatically placed in an administrative forbearance. This means that if you have federal student loans, you will not be required to make payments during this time. Additionally, interest on those loans has been suspended. If you are currently in a federal student loan forgiveness program, these months count towards your 120 payments if you otherwise qualify.

    You can still make payments toward your loans during this time. If you are in a position to do so, and would like to make payments, your payments will be applied directly to your principal balance rather than the interest on your loan, thus chipping away at your loan balance. Either way, you should take advantage of special debt relief opportunities created in light of the Covid-19 pandemic, if any apply to your situation.

    Unfortunately, during the coronavirus pandemic, private loan servicers are not required to offer relief in the form of forbearance or suspending interest. However, some companies have chosen to do so, and it is important to contact your lender to determine what – if any – relief they may be offering.

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    Is Student Loan Forgiveness By Executive Order Legal

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    Legislation to forgive student loans is unlikely to occur before the end of the summer, since payments on federal student loans are paused until January 31, 2022.

    Is Student Loan Forgiveness By Executive Order Legal?

    Loan Forgiveness For Military

    Each branch of the military has programs that help qualified members pay off their student loans, but the loan amounts forgiven and the requirements that must be met vary dramatically.

    Visit the Complete Guide to Military Student Loan Forgiveness and Repayment and find the program that best suits your situation and branch of the military.

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    Next Steps To Consider

    If you qualify for student loan forgiveness or discharge, conducting the proper research and ensuring that you have the approved documentation on hand can help you get the forgiveness you need. The application process can vary based on the situation, so contact your loan servicer if you have any questions.

    If youre still having trouble paying your student loans but dont qualify for a forgiveness program, refinancing your student loans can save you money by lowering your interest rate and consolidating multiple loans into a single monthly payment.

    Bidens Student Loan Forgiveness And Relief Initiatives

    About the Student Loan Forgiveness Program

    In the course of the last few months, the Biden administration has used executive action to provide both widespread and targeted relief to student loan borrowers:

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    Additional Student Debt Relief

    If your loans didnt qualify for benefits under the CARES Act, contact your lender to discuss relief options. Many lenders are offering three months or more of paused payments.

    You can also apply to enroll in an IDR plan so you can take advantage of the free forgiveness credits and reduce your monthly payment when required payments resume.

    Additionally, certain higher education groups are calling for the government to extend current relief measures and expand borrower benefits. For example, the American Council of Education, which includes more than 30 other higher education groups, has requested that Congress extend CARES Act student loan benefits to at least June 2021 or until unemployment falls below 8% for three consecutive months. These and other proposals are just requests at this time, but they show that the discussion around student loan borrower relief isnt going to be over anytime soon.

    Tackle Debt From High To Low Interest

    If you have other debts charging more, such as credit cards or personal loans, always tackle them before your student loans.

    However, if youre in a good spot with your finances, have a steady income, and want to chip away at your student loans, target loans with the highest interest rate first.

    Because you dont have to make payments across all of your loans right now, you can target the loans that will be more expensive throughout the life of the loan and everything that you pay will go towards principal.

    For borrowers who do have three to six months of savings, now is a great time to pay off your loans. Its the first time in history that we have payment suspension, says Taylor.

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    Laurel Taylor: $10000 Would Be Great But Dont Count On It

    Based on all the relief that student borrowers have been given in the last year, there will be some debt forgiveness, according to a former Google executive who founded a student loan repayment platform. The question is, how much?

    I think the $10,000 in forgiveness is likely, but Im cautious about anything more than that, says Laurel Taylor, CEO and founder of

    Even forgiving just $10,000 in student debt would completely eliminate student loans for about 16 million people. It would make a huge difference, especially for those who are most likely to default, Taylor says.

    But no borrower should depend on that possibility, Taylor cautions: it might not pass anytime soon, or at all. Biden is examining whether he has the executive authority, but the bottom line is that there is a lot of confusion. Thats what were seeing on our platform when our users are engaging with their student debt, says Taylor.

    Can I Count On My Student Loans Being Forgiven

    $10,000 Student Loan Forgiveness (Heroes Act Proposal)

    Although the odds of student loan borrowers getting their balances reduced or eliminated have never been greater, “until legislation is signed into law, you can’t count on anything,” Kantrowitz said.

    Currently, there are pending reports from the U.S. Department of Education and the Justice Department on whether the president has the legal authority to implement loan forgiveness through executive action, Kantrowitz said. It’s still unclear when the findings will be published.

    In the meantime, he added, “borrowers should not take any precipitous action in anticipation of loan forgiveness.”

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    Does Any Student Loan Forgiveness Act Exist

    Yes. The Student Loan Forgiveness Act was a congressional bill introduced in 2012 intended to help borrowers with paying down their student debt.

    In addition to capping interest rates for all federal loans, the proposed law would have introduced a repayment plan that allows borrowers to have their loans forgiven after 10 years if they made monthly payments equivalent to 10% of their adjusted gross income. The bill also would have made borrowers in public service jobs eligible for loan forgiveness after five years, instead of 10.

    Sound too good to be true? It was. The bill never made it out of committee.

    Do I Need To Do Anything If My Payments Are Auto

    If your student loans are set up on autopay, you shouldnt have to do anything to suspend your payments. Your automatic payments should resume when the forbearance period ends. Your loan servicer will begin notifying borrowers of upcoming payments as the date approaches for the end of the CARES Act relief period.

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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, going to the My Aid page and scrolling down to the Loan Breakdown section.

    Loan Forgiveness For Lawyers

    What Is Student Loan Forgiveness?

    There are about a million jokes about lawyers being bloodsuckers on society, but the federal loan program begs to differ. There is a financial incentive for lawyers to practice in public service or government offices in order to have some portion of their law school loan forgiven.

    For example, the Department of Justice provides up to $60,000 in loan forgiveness for lawyers who work there for at least three years. The Air Force Judge Advocate program offers up to $65,000 in loan forgiveness.

    The best place to start looking might be your own law school, since several colleges forgive some or all of the student loans for students who make less than $60,000 a year.

    That amount varies, so check with your school to get actual requirements and amount forgiven. If you cant qualify for a forgiveness program, look into refinancing your law school debt.

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    How To Qualify For Student Loan Forgiveness

    To qualify for student loan forgiveness under this act, you must be enrolled at an eligible school, maintain enrollment in the program of study associated with your student loans. Also, certain obligations like making 120 student loan payments while maintaining a specific employment type need to be met to qualify for student loan forgiveness under this act.

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