Do I Qualify For Student Loan Forgiveness?

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In August 2022, the student loan forgiveness plan was proposed to cancel over $441 billion of student loans. The proposal has undergone many modifications since then. The mass loan cancellation was rejected by the Supreme Court mid-this year. 

But other initiatives have been put in place to cancel your student loan,  provided you are eligible. Do I qualify for student loan forgiveness?

Federal Student Loan Forgiveness Programs  

Loan forgiveness means your debt is cancelled or partially paid by another entity. Since loan forgiveness is a federal government initiative, it means the federal gov paid for your loan.

Student Loan Forgiveness Programs

There are diverse forgiveness programs for student loans for eligible borrowers. Getting your student loan forgiven often requires that you work in a public sector or a non-profit organisation. You must also have a certain year of consistently paying your student loan. 

  • Public Service Loan Forgiveness Program (PSLF)

Employees in public sectors or non-profit organizations are eligible for the  Public Service Loan Forgiveness program. For PSLF, you need 120 consistent payments within ten years.

You can implement the PSLF Help Tool to track your qualification for your loan forgiveness. The only kind of federal loan that can be forgiven through the PSLF program is a Federal Direct Loan. Always recertify your IDR plan yearly to tighten your eligibility for loan forgiveness after the 10-year window. 

  • Teachers Loan Forgiveness Program 

Working in a low-income school or any education service agency for five years makes you eligible for the Teacher Loan Forgiveness program. Fill and submit your Teacher Loan Forgiveness Application to your loan servicer for processing. 

  • Income-Driven Repayment 

The Income-driven repayment plan is otherwise known as IDR. Your family size and discretionary income are used to calculate your monthly repayment amount. You may not pay anything monthly if your income is below the Federal Poverty Level for your family size. 

The IDR payment plan extends between 15-20 years. Borrowers who paid their loans consistently for 15 – 20 years are automatically eligible for student loan forgiveness. This means that your remaining balance after these years will be cancelled.

Who Is Qualified For Student Loan Forgiveness Program?

Public sector employees and low-income school teachers are qualified for federal loan forgiveness programs. Working in a non-profit organisation also makes you eligible for a federal loan forgiveness program. 

Other compulsory criteria include timely payment of your loan, avoidance of default and yearly rectification of your IDR plan.