The Snowball Wealth Financial Roadmap
Student loan forgiveness sounds like an unfeasible option, but some programs can help borrowers pay for all or some part of federal student loans.
The first step to qualifying for forgiveness is submitting an income-driven repayment plan application and filling it out every year. You’ll want to keep up with this because recertifying your application is a critical step to getting your federal student loans forgiven.
The easiest way to know if you’re eligible is to have good communication with your student loan service provider. Know who you can call and who will have your information. You’ll want to call them when you are recertifying, and they will notify you if you have a balance at the end of repayment periods.
There is one possible downside to keep in mind if you are deciding to go through loan forgiveness programs. You might be charged taxes, so make sure you have enough saved if this is the scenario for you.
Available for Direct Loans and FFEL Program loans.
On the FAFSA website: If you teach full-time for five complete and consecutive academic years in a low-income elementary school, secondary school, or educational service agency, you may be eligible for forgiveness of up to $17,500 on your Direct Loan or FFEL Program loans.
Available for Direct Loans.
On the FAFSA website: If you are employed by a government or not-for-profit organization, you may be able to receive loan forgiveness under the Public Service Loan Forgiveness (PSLF) Program. PSLF forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.
Available for Direct Loans, FFEL Program loans, and Perkins Loans.
COVID affected the way students learn, how students teach, and the overall quality of education. Many people are concerned that their school will close and are questioning whether they should withdraw. On the FAFSA website, it says, if your school closes while you’re enrolled or soon after you withdraw, you may be eligible for discharge of your federal student loan.
Available for Direct Loans.
Another way borrowers can get their student loans paid is through the borrower’s defense to a repayment program. If you feel that you were misled when you signed your student loan plan, you might be able to get your student loans fully paid.
If your application was denied, you’d have to continue making your regular loan payments. If you believe there might be an error with the application, contact your loan service provider. If you need help lowering your interest rate, or if you need help creating a feasible student loan repayment plan, sign up for a free Snowball Wealth account.
Source: FAFSA website