The Ultimate guide to Student Loan Forgiveness : How to Get Debt Relief

 STUDENT LOAN FORGIVENESS

WHAT IS STUDENT LOAN FORGIVENESS ?

Student Loan Forgiveness is a financial relief scheme that eliminates a portion or complete of a borrower's student loan debt. These borrowers  have taken out loan to pay their college or university fee. This scheme is been introduced to help borrower's reduce their debt burden and improve their personal finance. The US Government invest a good amount from budget plan for student loan forgiveness. 

DIFFERENT TYPES OF LOAN FORGIVENESS PROGRAM :

a. Public Service Loan Forgiveness(PSLF) Program

b. Teacher Loan Forgiveness Program

c. The Perkins Loan Cancellation Program

d. Total & Permanent Disability

e. Closed School Loan Discharge

f. Borrower Defense (School Misled)

g. False Certification Discharge

h. Forgery Loan Discharge

i. Discharge in Bankruptcy

j. Discharge due to Death

ELIGIBILITY CRITERIA  AND STEPS TO APPLY FOR DIFFERENT LOAN FORGIVENESS PROGRAM : 

a) Public Service Loan Forgiveness Program (PSLF)

• Have federal direct loans: You can't apply for  PSLF for Perkins Loan or FFEL Loans. However you can consolidate your other federal loans in to direct loans in order to be eligible for PSLF.

• Full-Time employee for a qualifying public service employer: It includes federal government, local & state governments certain non-profit organization.

• Make 120 qualifying payments: qualifying payments are made under an IDR- income driven plan such as Pay As your Earn or Revised Pay As you Earn.

• Make Payments on exact time: your payment must be made on time and in full. If any payment is missed, you need to start from 0 qualifying payment.

How to Apply for PSLF?

• Download PSLF form =>   PSLF Form

• Use PFL Help tool : a) To fill your PSLF Form b)send the form to employer to digitally sign & submit it to PSLF servicer for processing.

• If you wish to do it manually then: print the blank form, fill all information, sign it & get employer sign as well, and mail the form to below mentioned address :

          U.S Department of Education, 

         633 Spirit Drive, Chesterfield, MO 63005, United States

b)Teacher Loan Forgiveness Program

• Federal direct loans or Federal Family education loan: You aren't eligible for teacher loan forgiveness program if you took perkins loans.

• Full-Time teacher in a school or educational service for minimum 5 years: the school or educational service must serve at-least 30% students from low income family.

• Must be a highly qualified teacher: This means you must have a Bachelor's degree and certifications needed for a qualified teacher.

• Make qualifying payments: qualifying payments are made under an IDR- income driven plan such as Pay As your Earn or Revised Pay As you Earn.

How to Apply for Teacher Loan Forgiveness Program?

• Download form => Teacher Loan Forgiveness Program Form

• Fill your information, certification should be done by the chief executive officer or respective head of the school/educational service & send it to your loan provider.

• If you have multiple loan provider then you need to do the following steps for each loan provider.

c. The Perkins Loan Cancellation Program

• Have Federal Perkins Loans: Direct Loans or FFEL loan's can't get cancellation for Perkins Loans.

• Work Full-Time in public sector jobs for 5 years: must work in public sector jobs like education, healthcare , military and other fields for minimum 5 years.

• Make Qualifying Payments: qualifying payments are done under Standard Repayment Plan or Income-Contingent Repayment Plan.

How to Apply for Perkins Loan Cancellation Program?

• Download form =>  Perkins Loan Cancellation Form

• Fill your information & get certification from your organization.

• Mail it to your loan provider , make sure to send it to each provider if you got multiple loan provider.

d) Total & Permanent Disability Discharge Program

• Disability Documentation: The disability determination must be made from an authorized medical professional, US Department of Veterans Affairs or the Social Security Administration.

• Income Requirements: Income requirements informations are mentioned on Federal Student's Aid website. It depends on your state of residence and family size.

How to Apply for Total & Permanent Disability Discharge?

• Click Here to Apply => Total & Permanent Disability Discharge

• All information are mentioned in the website, you just need to follow those simple steps.

e) Closed School Loan Discharge

• No private loans: Have federal direct loans, FFEL or Perkins loans. You will not be eligible to apply for Closed School Loan Discharge for private loans.

• Attended a school which closes while you enrolled or soon after you withdraw.

• Did not complete your education at the closed school.

• Make qualifying payments: Make at-least 12 qualifying payments before applying for closed school loan discharge.

How to Apply for Closed School Loan Discharge?

• Download Form => Closed School Loan Discharge Form

• Fill the form with maximum information and send it to education department.

• If you haven't heard anything from education department after 90 days then please get in touch with the loan provider.

f) Borrower Defense (School Misled)

• Borrowed Federal Direct Loans: Only Federal Direct or FFEL loans are eligible , perkins loans aren't eligible for applying borrower defense discharge.

• School Misled : you took loan to attend a school which misled you or is engaged in other violation of certain laws.

How to Apply for Borrower Defense?

• Download Form => Borrower Defense Form

• Follow the simple steps mentioned in the form.

g) False Certification Discharge 

• Got Loan based on false certification from school: your school falsely certified your eligibility to receive the loan.

• Borrowed from Federal Direct Loan or FFEL Loans: you can't get false certifications for Perkins loans.

How to Apply for False Certification Discharge ?

• Download Form's => a) False Certification( Ability to benefit) 

                                            b) False Certification( Disqualifying Status)

                                            c) False Certification( Unauthorized Signature/Payment)

• You can fill it online via Federal Student's Aid website or fill the form manually, the forward it to education department.

h) Forgery Loan Discharge 

• Borrowed directly from Federal Direct Loans or FFEL Loans: You can't get Forgery Discharge for Perkins Loan.

• Signature Forged: Forgery must been made by someone other than you.

• Loan got approved without knowing or willingly: You must have not known or approved for the forgery.

How to Apply for Forgery Loan Discharge?

• Download form => Forgery Loan Discharge Form

• Fill the form online via Student's Aid website or fill manually , then send it to the education department.

i) Discharge in Bankruptcy

• Declared Bankruptcy: You can only file your discharge by filing Chapter 7 and Chapter 13 bankruptcy.

• Borrowed Direct Loans, FFEL or Perkins Loans.

• Adversary proceedings: It proves that repaying loan will impose undue hardship on you as well as your dependants.

How to Apply for Discharge in Bankruptcy ?

• Please visit the website and apply for it : Discharge in Bankruptcy file

• Follow the instructions mentioned in the official website.

j) Discharge Due to Death

• The borrower must have died.

• The loan must be a Federal Direct Loan, FFEL or Perkins Loan.

• Loan must be in good standing.

How to Apply for Discharge Due to Death?

• Find Loan Service Provider by logging in to Student's Federation Aid

• Request Loan provider for Death Discharge Application.

• Complete the application with borrower's information.

• Mail it to the educational department

COMMON MISTAKES TO AVOID:

• Not providing all the necessary information: The application may get rejected or delayed if all the mandatory information are not provided in the form.

• Making minor/major mistakes: Make sure to check your application few times before sending it to avoid minor/major mistakes.

• Not Submitting on Time: Make sure to submit the application on time since there is deadline for each application, the department will not accept the form if the deadline is crossed.

• Not following Up: Once you submit the application , make sure to follow up on it. It will help to ensure that your application will get processed in a timely manner.

ALTERNATIVE OPTIONS:

• Income-driven payment plans: It caps your student loan from your income. Even if you have a low-income you will be able to pay since it's based on your income.

• Public Service Loan Forgiveness: It forgives the remaining payment after 120 qualifying payments.

• Private Student Loan Forgiveness: There are some private student loan forgiveness which will forgive the remaining payment after making certain number of payments.

• Deferment: Deferment or forbearance is a way through which you can temporarily postpone your loan and repay it after an interval.

LATEST NEWS ON BIDEN ADMINISTRATION'S $1.2 BILLION  STUDENT LOAN FORGIVENESS FOR SAVE PLAN BORROWERS