Top student loan forgiveness programs of 2021

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Numerous advocates for student loan borrowers have continuously pressured Biden to use executive authority to cancel student loan debt. But nothing has happened so far.

Yes. The president directed the U.S. Education Department and the Department of Justice to conduct a legal review if it was possible to cancel student loans through executive action. But the reviews seem to be ongoing.

In May, the Biden administration published a budget proposal, but there weren’t any plans for broad student loan forgiveness. The president has stated his support to cancel some student loan debt, but you can’t depend on it. You still have to take full responsibility for your student loan debts.

Regardless of what goes on, we’ve outlined the student loan forgiveness programs you can still use now to get rid of your loan debts.

1.  Public Service Loan Forgiveness (PSLF)

The Public Service Loan Forgiveness program benefits people that work in public service jobs. Other various fields are also eligible for the program. The PSLF focuses more on the company you work for and not the job position.

You can find numerous jobs that are eligible for PSLF, and some of them might even surprise you. Some of the PSLF-qualifying jobs include groundskeeper, call center representative, geoscientist, animal shelter caretaker, etc.

You can qualify for total loan forgiveness after making 120 payments or ten years’ worth of monthly payments. You don’t have to make the payments consecutively, but you have to make it on a qualifying repayment plan.

Before you qualify for the PSLF, you need to be a full-time employee at a local or state government agency or non-profit organization. However, religious-based non-profits are not part, including partisan political or labor unions organizations.

Student loans that qualify include:

  • Direct PLUS loans
  • Direct consolidation loans
  • Direct subsidized and unsubsidized loans

How You Can Qualify For The PSLF

To ensure that you qualify for the Public Service Loan Forgiveness, you must submit the Employment Certification for PSLF form. The program requires that you send this form every year of your service. So submitting the forms every year ensures that you are on track for PSLF.

Another crucial step is changing to an income-driven repayment plan (more on that in the next section). You can lower your payments every month while extending your loan term to 20 or 25 years. However, if you maintain your standard plan, you won’t have any loan balance left for forgiveness after making payments for ten years.

Lastly, you can decide to consolidate your student loans into a direct consolidation loan. This option is beneficial if you have FFEL or Perkins loans. In addition, it makes your monthly payments simple by making you pay for a single loan each month.

Can I get forgiveness for my private student loans?

If you have private student loans, your options are limited compared to federal student loans. However, there are a few options for private student loan borrowers, such as refinancing, debt settlement, or bankruptcy. Check out the link to learn more about each of those options.

2.  Income-Driven Repayment Forgiveness

The federal government offers four primary income-driven repayment plans: IBR plan, PAYE plan, RePAYE plan, and ICR plan. These plans allow you to cap your student loan payments at a percentage of your income every month.

When you decide to enroll in any of these plans, you’ll get your outstanding loan balance forgiven. But that will be after 20 or 25 years, depending on the plan you choose. It’s ideal to choose any of these plans if you have massive student loans relative to your income.

The federal authorities cap your student loan payments at 10% or 15% of your discretionary income regarding the IBR plan. So as said earlier, if you make consistent monthly payments, you’ll be forgiven after 20 or 25 years, depending on the terms.

However, thanks to the student loan stimulus that was part of the Congress relief package in March 2021,

However, in March 2021, Congress introduced a student loan stimulus part of the relief package. In the stimulus, any loans forgiven under IBR won’t be taxed through 2025.

3.  Teacher Loan Forgiveness

Teacher Loan Forgiveness is another program that helps teachers to pay back their student loans. But to qualify, you have to work full-time in a low-income secondary or public elementary school for at least five consecutive years.

You can check out the Teacher Cancellation Low-Income directory to determine if your school is eligible. The amount for the loan forgiveness varies depending on the subject you teach. Elementary school teachers could get up to $5,000.

Secondary teachers who teach science, math, or special education teachers could get up to $17,500 in student loan forgiveness at any of the levels. Before you can qualify for the loan, you must have taken out your student loan after October 1, 1998.

4.  Student Loan Forgiveness For Nurses

Nurses with student loan debts have several options they can choose for loan forgiveness. Some of them include the Public Student Loan Forgiveness, Perkins loan cancellation, and NURSE Corps Loan Repayment Program.

For the NURSE CLRP, it’s possible to get up to 60% of your student loans paid for working over two years. If you work for the third year, you can be eligible for another 25% of your loans being forgiven.

However, the best route to take among the three is the Public Service Loan Forgiveness. Few loan borrowers have Perkins loans, and the NURSE Corps programs are very competitive.

5.  Military Student Loan Assistance And Forgiveness

Military members in the Navy, Army, National Guard, Coast Guard, and Air Force may be eligible for their loan forgiveness programs. For example, in the Army’s College Loan Repayment Program, you can get up to $65,000 in loan forgiveness. The Navy program also gives up to $65,000. The National Guard LRAP, however, awards up to $50,000.

Keep in mind that forgiveness is not an alternative for defaulted loans. You’ll have to use rehabilitation or consolidation to get your defaulted federal loans into good shape. Only then can they qualify for forgiveness programs.

Final Thoughts

If you don’t qualify for student loan forgiveness, you can choose other alternatives. You can look into student loan refinancing. However, you need to consider your options before you make a final decision.

For example, if you refinance your federal student loans into private student loans, you’ll lose federal student loan forgiveness and repayment programs. These programs have proved to be helpful, especially during the COVID-19 pandemic.

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