Janice Lozano
If you need help paying off your student loans, there are several options available to you. Firstly, you can look into income-driven repayment (IDR) plans, which base your monthly payments on your income and family size, and may offer loan forgiveness after a certain number of qualifying payments. Additionally, the Public Service Loan Forgiveness (PSLF) Program provides loan forgiveness for those working for the government or non-profit organisations. If you have a disability that impacts your ability to work, you may qualify for a TPD discharge, and military service members with federal student loans may be eligible for special benefits. Finally, if you have a complaint against a student loan servicer or need help with defaults, you can file a Student Loan Help Request or contact state and federal agencies for assistance.
Where can I get help to pay my student loans?
| Characteristics | Values |
|---|---|
| Loan Forgiveness | The government may offer loan forgiveness or discharge. For example, if you work full-time for a government or not-for-profit organization, you may qualify for forgiveness of your Direct Loans. |
| Income-Driven Repayment Plans | Your monthly payments can be based on your income and family size. If you have no income, you pay nothing. After 10 to 25 years of payments, the remaining balance may be forgiven. |
| Deferment or Forbearance | You can temporarily pay less by requesting a deferment (if you qualify, e.g., due to unemployment) or a forbearance (granted at the servicer's discretion). |
| Debt Cancellation or Forgiveness Programs | You may qualify for programs like Public Service Loan Forgiveness, Borrower Defense to Repayment (if your school defrauded you), or Closed School Discharge. |
| Disability Discharge | If you have a disability that severely limits your work ability, you may be eligible for a Total and Permanent Disability (TPD) discharge and won't have to repay federal student loans. |
| Military Service Benefits | The U.S. Department of Education and Department of Defense offer special benefits for military service members with federal student loans. |
| Teacher Loan Forgiveness | Teachers may be eligible for loan forgiveness of up to $17,500 if they teach full-time for five consecutive years in certain eligible schools. |
| Free Resources | You can get free assistance from loan servicers or websites like studentaid.gov. Your loan servicer should be your first point of contact. |
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What You'll Learn
Income-driven repayment plans
Income-driven repayment (IDR) plans are designed to assist student loan borrowers who are struggling with unaffordable payments due to low income. Instead of fixed payments over ten years, IDR plans set payments as a fraction of the borrower's discretionary income. However, most IDR plans are currently in legal limbo due to litigation against the newest plan proposed by the Biden administration.
The House has passed a bill to address this issue, which includes significant changes to the student loan program, specifically targeting IDR plans. The proposed Repayment Assistance Plan (RAP) differs from existing IDR plans in several ways. One key difference is the introduction of a minimum monthly payment of $10, regardless of the borrower's income. This is a shift from current IDR plans, where borrowers with incomes below a certain threshold (the "protected income threshold") are not required to make any payments.
The RAP's minimum payment requirement aims to encourage responsible borrowing, timely repayment, and accountability among students. While it may help borrowers develop good habits and stay engaged with the repayment system, it could also pose a financial hardship for some. Additionally, borrowers with stagnant incomes making only the minimum payment may face a longer repayment period, potentially deterring them from choosing this plan despite its potential benefits.
Despite the ongoing legal uncertainties, the discussion around minimum payments in income-driven repayment plans highlights the importance of balancing borrower responsibility and financial feasibility. As the Senate version of the bill also includes similar loan repayment provisions, there is a possibility that the RAP could come into effect, offering a new approach to managing student loan debt.
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Loan forgiveness programmes for teachers
There are several loan forgiveness programs available for teachers in the United States. These programs can provide significant financial relief by forgiving a portion or the entirety of a teacher's student loan debt. Here is an overview of some of the key loan forgiveness programs for teachers:
Public Service Loan Forgiveness (PSLF)
The PSLF program is designed for individuals working in public service careers, including teachers. To qualify for PSLF, you must make your student loan payments on time for ten years (120 payments) while working full-time in public education, early childhood, or childcare. After fulfilling these requirements, you can apply to have the remaining balance of your loans forgiven. It is important to note that only Direct Loans, which are federal loans, are eligible for PSLF.
Teacher Loan Forgiveness (TLF)
The Teacher Loan Forgiveness program offers up to $17,500 in loan forgiveness for highly qualified special education, mathematics, and science teachers who teach full-time at eligible low-income schools or in high-needs subjects. To qualify, teachers must complete five complete and consecutive academic years of teaching. Other eligible teachers can still qualify for up to $5,000 in loan forgiveness. Direct Subsidized and Unsubsidized Loans, as well as Subsidized and Unsubsidized Federal Stafford Loans, are eligible for TLF.
Perkins Loan Cancellation
The Perkins Loan Cancellation program is specifically for teachers with Federal Perkins Loans. This program offers up to 100% loan forgiveness for teachers who work full-time at low-income schools or teach certain subjects, such as mathematics, science, special education, bilingual education, or foreign languages. Unlike other forgiveness programs, Perkins Loan Cancellation forgives portions of your loans in yearly increments, with 15% cancelled per year for the first and second years of service, including the accrued interest for that year.
It is important to carefully review the requirements and eligibility criteria for each loan forgiveness program, as they may vary. Additionally, some programs may have specific restrictions or limitations on the types of loans that qualify. By taking advantage of these loan forgiveness programs, teachers can receive assistance in repaying their student loans and focus on their important work in education.
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Loan discharge eligibility
There are several ways to qualify for loan discharge eligibility. The most common way is through Public Service Loan Forgiveness (PSLF). Under PSLF, if you are employed by a government or not-for-profit organisation, you may be eligible to have the remaining balance of your eligible Direct Loans forgiven after making 120 qualifying monthly payments under an accepted repayment plan. You can use the PSLF Help Tool to review your employer's eligibility and prepare and sign your PSLF form.
Another option is Teacher Loan Forgiveness, which applies if you teach full-time for five complete and consecutive academic years in a low-income elementary or secondary school, or educational service agency, and you have a Direct Loan or Federal Family Education Loan (FFEL) Program loan. It is important to note that you cannot receive credit toward both Teacher Loan Forgiveness and PSLF for the same period of teaching.
If you have been in repayment for 20 or 25 years, you may be eligible for Income-Driven Repayment (IDR) loan forgiveness. An IDR plan bases your monthly payment on your income and family size, and any remaining balance on your student loans will be forgiven after you make the required number of payments over 20 or 25 years. Additionally, Federal Family Education Loan (FFEL) Program loans and Federal Perkins Loans may become eligible for PSLF if you consolidate your loans into the Direct Loan Program.
In some cases, your school's actions may also be grounds for loan discharge. This includes situations where you took out a loan to attend a school that misled you or engaged in other misconduct in violation of certain laws. Furthermore, if you are subject to extended periods of qualifying military service, you may be eligible for a discharge of your TEACH Grant service obligations.
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Student loan servicers
Student loan borrowers can get help with their payments from student loan servicers. These companies specialise in providing customer service for student loans.
One such company is Nelnet, a student loan servicing company based in Lincoln, Nebraska. Nelnet provides customer service for Federal Direct Loan Program and Federal Family Education Loan (FFEL) Program loans that are owned by the US Department of Education. FFEL loans were originally borrowed from a bank, lender, or non-profit organisation before 1 July 2010.
Nelnet has two websites where borrowers can directly access their student loans without needing to visit the main Nelnet website. The website borrowers need to access depends on their loan type: Nelnet.studentaid.gov for federal loans under accounts beginning with E, and SloanServicing.com for commercial loans under accounts beginning with D and J.
Sloan Servicing is another student loan servicing company that provides customer service for commercially held FFEL Program loans.
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Debt cancellation programmes
Debt cancellation or loan forgiveness programmes are a great way to get help with your student loans. These programmes are usually offered by the government and can provide full or partial loan forgiveness. Here are some of the available options:
Income-Driven Repayment (IDR) Plans
IDR plans base your monthly loan repayment amount on your income and family size. If you consistently repay your loans under an IDR plan, the remaining balance may be forgiven after 20 or 25 years.
Public Service Loan Forgiveness (PSLF)
If you work full-time for a government or not-for-profit organisation, you may qualify for forgiveness of the remaining balance of your Direct Loans through the PSLF programme.
Teacher Loan Forgiveness (TLF) Programme
If you teach full-time for five consecutive academic years in certain elementary or secondary schools serving low-income families, you may be eligible for forgiveness of up to $17,500.
Total and Permanent Disability (TPD) Discharge
If you have a physical or mental disability that severely limits your ability to work now and in the future, you may qualify for a TPD discharge. With this, you won't have to repay your federal student loans or complete any outstanding service obligations.
Military Service Benefits
The US Department of Education and Department of Defense offer special benefits for military service members with federal student loans, including interest rate caps and loan repayment programs. Additionally, your military service can count toward PSLF.
Remember, these are just a few examples of debt cancellation programmes available. Be sure to research and explore all your options to find the programmes that best fit your circumstances.
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Frequently asked questions
You can get help with your student loans through federal student loan programs. These include income-driven repayment (IDR) plans, which base your monthly payment on your income and family size, and Public Service Loan Forgiveness (PSLF), which forgives the remaining balance on your loans after 120 monthly payments while working for the government or a nonprofit.
IDR plans include SAVE (formerly REPAYE), IBR, ICR, and PAYE. These plans offer the possibility of loan forgiveness after a certain number of years of qualifying payments. Your monthly payment amount will depend on your income and family size.
PSLF is a program that forgives the remaining balance on your Direct Loans after you’ve made 120 monthly payments under a qualifying repayment plan while working at least 30 hours per week for the government or a nonprofit employer.
To apply for PSLF, you can use the PSLF Help Tool. You will need to file a PSLF Form to certify all the qualifying employment you have held since October 1, 2007.
If you live in Massachusetts, you can file a Student Loan Help Request with the Ombudsman's Student Loan Assistance Unit if you have a complaint against a student loan servicer or need help getting out of default. If you don't live in Massachusetts, you can contact other state and federal agencies for help. Additionally, you can check if you qualify for loan forgiveness or discharge due to disability, school closure, or other reasons.
