Student Loan Forgiveness (and Other Ways the Government Can Help You Repay Your Loans)

Maybe you’ve heard or read about student loan forgiveness and you’re wondering what it is or if it is really possible? Or maybe you know a little about it and you want to find out if you qualify. Well, you’ve come to the right place. We’ll answer these questions and tell you where to go to learn more.

What is loan forgiveness?

Loan forgiveness is the cancellation of all or some portion of your federal student loan balance. Yes, that’s right—cancellation of your loan balance.  If your loan is forgiven, you are no longer required to repay that loan.

Is it really possible to have your student loans forgiven?

Yes! However, there are very specific eligibility requirements for each situation in which you can apply for loan forgiveness. If you think you may qualify, it’s definitely worth investigating.

How do I get my loans forgiven?

There are a number of situations under which you can have your federal student loan balance forgiven, and we’ve provided a few in this post. You will, however, want to research your options at StudentAid.gov/repay and contact your loan servicer for any questions you may have about student loan forgiveness.

A couple examples of situations in which your federal student loans may be forgiven include:

  • Teacher Loan Forgiveness: If you teach full-time for five complete and consecutive academic years in certain elementary and secondary schools and educational service agencies that serve low-income families, and meet other qualifications, you may be eligible for forgiveness of up to a combined total of $17,500 on certain federal student loans. For details about this program, see Teacher Loan Forgiveness.
  • Public Service Loan Forgiveness (PSLF): If you work full-time in certain public service jobs you may qualify for forgiveness of the remaining balance of your Direct Loans after you’ve made 120 qualifying payments on those loans—that’s usually about 10 years of payments. Serving in the Peace Corps or AmeriCorps is considered qualifying employment. For loan repayment and borrower eligibility requirements, see Public Service Loan Forgiveness.

There are additional situations that allow you to apply for cancellation of your federal student loans. For example, if you are totally and permanently disabled, a member of the U.S. armed forces (serving in area of hostilities), a member of the Peace Corps, or a law enforcement or corrections officer, you may be eligible for cancellation of a portion of your federal student loan. Learn more about how you may qualify for loan forgiveness and contact your loan servicer with questions.

Are there other ways in which I can get help repaying my loans?

There are additional government programs that provide student loan repayment assistance for individuals who provide certain types of service. A couple examples include:

  • Military Service: In acknowledgement of your service to our country, there are special benefits and repayment options for your student loans available from the U.S. Department of Education and the U.S. Department of Defense. Learn about federal student loan benefits for members of the U.S. Armed Forces.
  • AmeriCorps: The Segal AmeriCorps Education Award is a post-service benefit received by participants who complete a term of national service in an approved AmeriCorps program—AmeriCorps VISTA, AmeriCorps NCCC, or AmeriCorps State and National. An AmeriCorps member serving in a full-time term of national service is required to complete the service within 12 months. Upon successful completion of the service, members are eligible to receive a Segal AmeriCorps Education Award which can be used to pay educational costs at eligible postsecondary institutions, as well as to repay qualified student loans.

Remember, there are resources available to help you repay your loans. In addition to loan forgiveness and other benefit programs, you also have other options if you find yourself in a situation where you’re having trouble making your loan payments. Make sure to discuss your options with your loan servicer.

Lisa Rhodes is a writer at the Department of Education’s office of Federal Student Aid.

Don’t Fall Behind on Your Student Loan Payments

DontFallBehind

Life can throw some unexpected curves at you. And when this happens, you often wind up with unwelcome expenses. In these hectic moments, it might seem impossible to think about your federal student loan payments, but that’s exactly what you should do.

If you are having trouble making your loan payments, you should remember that federal student loans offer many flexible repayment options. It might seem easier to ignore your student loans, but that won’t make them go away. In fact, defaulting on a federal student loan (not making payments for more than 270 days) can have serious consequences. If your loan defaults:

  • your credit score will be negatively impacted, which could prevent you from qualifying for a car or home loan and may jeopardize your future employment opportunities;
  • your loan may be placed with a collection agency, and you will be responsible for paying the collection fees; and
  • your paycheck or federal income tax refund could be withheld to help repay your debt.

But, this doesn’t have to happen to you. When you’re struggling to make your student loan payments, you should contact your loan servicer. Your loan servicer can discuss your options for lowering or temporarily postponing your payments.

Here are some options you might want to consider:

  • Switch your repayment plan: You may be able to change your repayment plan to one with lower monthly payments. Just beware that lowering your monthly payments may result in paying more over the life of the loan. You can compare your payments under each repayment plan using our Repayment Estimator.
  • Ask for a deferment or forbearance:deferment or forbearance allows you to temporarily postpone or reduce your federal student loan payments. You may qualify for a deferment or forbearance for a variety of reasons, including financial/economic hardship, unemployment or military service. It’s important to note that, in most cases, interest will continue to accrue on your loans when they are in a deferment or forbearance status (except for subsidized loans in deferment).
  • Consolidate your loans: If you have multiple federal student loans, you may consider combining them into one loan.  A Direct Consolidation Loan often results in a lower monthly payment, but does extend the amount of time you have to repay your loan which causes you to pay more over the life of the loan. Find out more about the pros and cons of loan consolidation.

For more information about options for successfully managing your loans, visit https://studentaid.ed.gov/repay-loans or contact your loan servicer.

Tara Marini is a communication analyst at the Department of Education’s office of Federal Student Aid.

Road to College: Summer Tips for Rising Seniors

college arne quoteYes, soon-to-be high school seniors- your time has come! As you bask in the excitement of the upcoming year, set aside time this summer to lay the groundwork for a smooth college process. Trust me, you will be thankful you did later!

With all the information available for seniors, it’s essential for students and their families to take advantage of the tools that can help best inform you on taking the right path for secondary education.

Here are tips & tools from ED to get a head start this summer:

Tip: Search for the type of college that will best suit you. Narrow down the program, size, type, location, and tuition cost of colleges, this will help you zero in on a concise list of institutions to apply to come fall.

  • College ScorecardIncludes information about a particular college’s cost, its graduation rates and the average amount its students borrow. It is designed to help you compare colleges and choose one that is well-suited to your individual needs.

Tip: Research the tuition and fees of the institutions that top your college list. This will help give you and your family a clearer view of the potential cost of each institution right from the start of the college process.

  • College Affordability and Transparency Center: ED has compiled lists of institutions based on the tuition and fees and net prices (the price of attendance after considering all grant and scholarship aid) charged to students.

Tip: It is never too early to look for scholarships! Some deadlines are as early as a year before college starts, so take time this summer to research and begin applying for scholarships.

  • Federal Student Aid: There are thousands of scholarships, from all kinds of organizations; Federal Student Aid provides tips and resources to help you find scholarships you may be eligible for.

Kelsey Donohue works in the Office of Communication and Outreach at the U.S. Department of Education.

5 Things to Consider When Taking Out Student Loans

student loan repaymentFederal student loans can be a great way to help pay for college or career school.  While you shouldn’t be afraid to take out federal student loans, you should be smart about it. Before you take out a loan, it’s important to understand that a loan is a legal obligation that you will be responsible for repaying with interest.

Here are some tips to help you become a responsible borrower.

  1. Keep track of how much you’re borrowing. Think about how the amount of your loans will affect your future finances, and how much you can afford to repay. Your student loan payments should be only a small percentage of your salary after you graduate, so it’s important not to borrow more than you need. To view all of your federal student loan information in one place, go to nslds.ed.gov, select Financial Aid Review, and log in.
  2. Research starting salaries in your field. Ask your school for starting salaries of recent graduates in your field of study to get an idea of how much you are likely to earn after you graduate. You can use the U.S. Department of Labor’s Occupational Outlook Handbook to estimate salaries for different careers or use a career search tool to research careers and view the average annual salary for each career.
  3. Understand the terms of your loan and keep copies of your loan documents. When you sign your promissory note, you are agreeing to repay the loan according to the terms of the note even if you don’t complete your education, can’t get a job after you complete the program, or you didn’t like the education you received.
  4. Make payments on time. You are required to pay the full amount required by your repayment plan, as partial payments do not fulfill your obligation to repay your student loan on time.  Find out more about student loan repayment, including when repayment starts, how to make your payment, repayment plan options, and more!
  5. Keep in touch with your loan servicer. Notify your loan servicer when you graduate; withdraw from school; drop below half-time status; transfer to another school; or change your name, address, or Social Security number. You also should contact your servicer if you’re having trouble making your scheduled loan payments. Your servicer has several options available to help you keep your loan in good standing.

Remember, federal student loans are an investment in your future so invest wisely.

Tara Young is a communication analyst at the Department of Education’s office of Federal Student Aid

4 Things to Do During Your Student Loan Grace Period

Grace 6 month 9 monthYour student loan grace period is a set amount of time after you graduate, leave school, or drop below half-time enrollment before you must begin repayment on your loan. For most student loans, the grace period is six months but in some instances, a grace period could be longer. The grace period gives you time to get financially settled and to select your repayment plan.*

Here are four things you can do during your grace period to prepare for repayment:

1. Get Organized

Start by tracking down all of your student loans. There is a website that allows you to view all your federal student loans in one place.

You can log into www.nslds.ed.gov using your Federal Student Aid PIN to view your loan balances, information about your loan servicer(s), and more.

Note: Don’t forget to check to see if you have private student loans.

2. Contact Your Loan Servicer

loan servicer is a company that handles the billing and other services on your federal student loan. Your loan servicer can help you choose a repayment plan, understand loan consolidation, and complete other tasks related to your federal student loan, so it is important to maintain contact with your loan servicer. If your circumstances change at any time during your repayment period, your loan servicer will be able to help.

To find out who your loan servicer is, visit nslds.ed.gov. You may have more than one loan servicer, so it is important that you look at each loan individually.

3. Estimate Your Monthly Payments Under Different Repayment Plans

Federal Student Aid recently launched a Repayment Estimator that lets you compare your monthly student loan payment under different repayment plans to help you figure out which repayment plan is right for you.

Just go to www.StudentLoans.gov –> Log in –> Click “Repayment Estimator” in bottom left corner. It will pull in all of your federal student loan information automatically so you can compare repayment plans based on your specific situation.

4. Select The Repayment Plan That Works For You

Although you may select or be assigned a repayment plan when you first begin repaying your student loan, you can change repayment plans at any time. Flexible repayment options are one of the greatest benefits of federal student loans. There are options to tie your monthly payments to your income and even ways you can have your loans forgiven if you are a teacher or employed in certain public service jobs. Once you have determined which repayment plan is right for you, you must contact your loan servicer to officially select a new repayment plan.

* Not all federal student loans have a grace period. Note that for many loans, interest will accrue during your grace period.

Nicole Callahan is a new media analyst at the Department of Education’s office of Federal Student Aid.