Here’s What You Wanted To Know About Student Loan Forgiveness

Student loan forgiveness is all about a student getting an exception from repaying either a part of or the complete federal student loan. You can have your loans forgiven if you use your borrowed money to pay for your post-secondary education as a student. Forgiveness is applicable for various loans, and the list includes a direct loan program, Perkins loan program, and a federal family education loan program.

Private loans are not eligible for student loan forgiveness. In this blog, we cover everything about student loan forgiveness. Let’s understand the types, eligibility criteria, special considerations, and how the process works.

How Does Student Loan Forgiveness Work?

Student loan debt in the second quarter of 2021 reached a whopping $1.73 trillion. More than $1.59 trillion has constituted the Federal Loan Portfolio. According to reports, 43 million people in the United States owe an average of $40,000.

Some borrowers might have been able to get their loans canceled or forgiven out of them. Student loan forgiveness relieves borrowers from repaying either a portion of or the entire debt. It might seem like a dream for someone who receives student loan forgiveness.

As mentioned above, the eligible loan programs for student loan forgiveness include the direct loan program, Perkins loan program, and federal family education loan program. However, not all are eligible to receive it. The eligibility requirements depend on the type of loan you have taken. People involved in public services, such as teachers, military service, government service, and AmeriCorps, are the ones who receive student loan forgiveness the most.

Discharging a loan is possible in cases when an educational institution cheats a student. Forgiveness and discharges are of course, not the same thing. If proven that an education institution is guilty of cheating a student, they might not have to repay the federal student loan debts.

Who Is Eligible For Student Loan Forgiveness?

The waiver of student loans is available only for the borrowers who have availed a direct loan program, Perkins loan program, or the FFEL or the federal family education loan program and submit a Public Service Loan Forgiveness or a PSLF form by October 31, 2022. The PSLF waiver is not applicable for Parent PLUS loans. Individuals engaged in active-duty service are allowed to count forbearances and deferments.

This relieves the service members who have stopped paying during active duty but couldn’t receive credit towards Public Service Loan Forgiveness, as per the announcement from the Department of Education. According to the United States Secretary of Education, the department has extended full support to the nurses, service members, teachers, and first responders, especially during the pandemic.

Are You Eligible For Student Loan Forgiveness?

First, check out what type of loan you have availed of. Direct stands for direct loans, Perkins stands for Perkins loans, and FFEL stands for Federal Family Education loans. Log in to your account on the Federal Student Aid portal. You will get to know what loan you have. Now go to the Loan Breakdown section to check out the complete list of loans you have availed of. Besides your pending loan information, it also has details on your merged loans, new loans, and the ones you have paid off. After reaching the View Loans section, click on View Loan Details to know more.

How Can You Apply For Student Loan Forgiveness?

Merge your Perkins loans and FFEL Program loans into a Direct Consolidation Loan latest by October 31, 2022. If you consolidate loans after October 31, you will not be eligible to receive credit for payments within this fixed period. After you finish the consolidation, you will be required to submit a PSLF form.

Next, you will need to visit the Federal Student Aid portal to check the type of loan you have taken. Verify that your employment is eligible for a waiver by completing the first step of the PSLF Help Tool. Submit the PSLF form through the PSLF Help Tool within the stipulated period, i.e., October 21, 2022.

If you are not working in the public service, you can apply for partial student loan forgiveness. However, that will take some time. But make sure you check the Federal government portal often to understand the eligibility and other factors. And if you know a student who qualifies for loan forgiveness, don’t forget to share this blog with them!