If you attended college, you probably have some form of student loan debt. According to The Institute for College Access & Success, 70% of college seniors who graduated in 2014 had student loan debt, with an average of $28,950 per borrower. As if that weren’t bad enough, the interest rates on those loans are often high, and there’s no guarantee that you’ll be able to find a job that will allow you to pay them off. However, there are some student loan debt forgiveness programs available if you qualify.
The different types of student loan debt forgiveness and discharge programs available
You’ve graduated from college and are ready to start your career. There’s just one problem: you’re buried under a mountain of student loan debt. As you start to make your student loan payments, you may be wondering if there’s any way to get your loans forgiven. The good news is that there are several different types of student loan forgiveness programs available. The bad news is that they can be very difficult to qualify for.
The first type of student loan forgiveness program is the Public Service Loan Forgiveness Program. This program is available to government employees and nonprofit workers. To qualify, you must make 120 on-time monthly payments. If you work full-time for a qualifying employer, the remaining balance on your loans will be forgiven after 10 years of payments.
The second type is the Teacher Loan Forgiveness Program. This program is available to teachers who teach full-time in certain high-needs fields for at least five years. If you qualify, up to $17,500 of your loans may be forgiven.
The third type of student loan forgiveness program is the Perkins Loan Cancellation and Discharge program. This program is available to teachers, law enforcement officers, volunteers in certain organizations, and members of the military. If you qualify, 100% of your Perkins Loans may be forgiven after five years of qualifying service.
Finally, there are a few Student Loan Discharge Programs available to those who qualify. These programs include the following: Closed School Discharge, Borrower Defense to Repayment Discharge, Total and Permanent Disability Discharge, Total and Permanent Disability for Veterans, and Discharge Due to Death (Parents PLUS Loans). These programs are varied and have different criteria for approval. But many online resources exist for these programs should you wish to research these programs more fully.
How to apply for student loan debt forgiveness
If you think you might qualify for student loan forgiveness, the first step is to contact your lender and see what options are available to you. They may have information on student loan forgiveness programs that you didn’t know about. Once you’ve found a program that you think you qualify for, the next step is to fill out an application and submit it to your lender. If everything goes well, you could be on your way to becoming debt-free!
What to do if you’re denied student loan debt forgiveness
Denied student loan debt forgiveness? Don’t worry, you’re not alone. In fact, according to a recent study, nearly 70% of all student loan borrowers are denied student loan debt forgiveness each year. But don’t despair – there are still options available to you. First, you can appeal the decision. Contact the financial aid office at your school and request a review of your file. Be sure to have all of your documentation in place before you make the call, as this will help to speed up the process. If you’re still not satisfied with the outcome, you can also consider consolidating your student loans or enrolling in an income-driven repayment plan.
Can You Settle Your Student Loans?
According to Forbes magazine, “student loan debt settlement is an option for borrowers who are struggling to repay their loans and are unable to qualify for income-driven repayment or public service loan forgiveness.”
Income-driven repayment plans lower your monthly payments by basing them on your income and family size. Public service loan forgiveness cancels your remaining student loan balance if you work for a qualifying employer full-time for 10 years while making 120 on-time monthly payments.
If you do not qualify for either of these programs, you may still be able to settle your student loans. The process of settling student loans is similar to that of other types of debt; however, there are a few key differences to keep in mind.
For one thing, private lenders are more likely to settle than federal lenders. This is because private lenders do not have as many options for collecting money from borrowers who default on their loans. Private lenders also tend to be more flexible when it comes to negotiating settlements.
Another key difference is that settled student loans are treated as taxable income by the IRS. This means that if you settle your $10,000 student loan for $5,000, you will have to pay taxes on the $5,000 as if it were regular income.
The best way to avoid this is to negotiate a lump sum payment with the lender rather than making monthly payments over time. That way, you will only have to pay taxes on the lump sum when you file your taxes for that year rather than paying taxes plus interest on the entire original loan amount every month.
Tips for paying off your student loans faster
If you’re one of the millions of Americans struggling to pay off student loan debt, you’re not alone. The average student loan borrower owes over $37,000, and the total student loan debt in the U.S. has reached nearly $1.6 trillion. While it can feel overwhelming, there are some things you can do to pay off your student loans faster.
One option is to consolidate your loans into a single payment. This can help you save money on interest and make it easier to keep track of your payments. Another option is to sign up for auto-debit, which will automatically deduct your monthly payment from your account. This can help you avoid missed payments and late fees. You may also want to consider making extra payments when you can afford it. Even an extra $50 per month can make a big difference over time.
Whatever strategy you choose, remember that there’s no magic solution for paying off student loans. It will take time and effort, but if you’re diligent, you can get rid of that debt for good.
If you find yourself overwhelmed with student loan debt or other types of unsecured debt such as cell phone, or installment/payday loans, contact Progressive Debt Relief for a free consultation. They have a wealth of experience and expertise working with major creditors. 1.877.590.1847.
*This content must be used for informational purposes only. Progressive Debt Relief does not provide legal, financial or tax advice and the above should not be construed as such.
