Loan Forgiveness Plans For Students

Loan Forgiveness Plans For Students

Student Loan Forgiveness Plans

Several programs offer student loan forgiveness, a way for borrowers to eliminate all or part of their student loans. These programs are usually for borrowers who work in certain public service or non-profit jobs or meet other specific requirements. Some examples of student loan forgiveness programs include:

Public Service Loan Forgiveness (PSLF) is available to borrowers working full-time in certain public service or non-profit jobs. However, they should also be making 120 on-time, full, scheduled monthly payments on their Direct Loans. If you qualify, the remaining balance on your loans may be forgiven after ten years of payments.

Teacher Loan Forgiveness is available to teachers who have taught full-time for five consecutive, complete academic years. They should have done that in a low-income elementary or secondary school or educational service agency. Teachers eligible for this program may have up to $17,500 of their Direct Subsidized and Unsubsidized Loans forgiven.

Perkins Loan Cancellation and Discharge are available to borrowers who work in certain public service or non-profit jobs. Sometimes they may need to meet other specific requirements as well. If you qualify, a they may cancel or discharge a portion of your Perkins Loans.

Income-Driven Repayment Plans are several income-driven repayment plans available to borrowers with federal student loans. These plans base your monthly student loan payment on your income and family size. They may extend the repayment period for your loans. For example, suppose you make payments under an income-driven repayment plan for a certain number of years (usually 20-25). And suppose, you have yet to fully repay your loans by the end of that period. In that case, they may forgive the remaining balance.

Joe Biden’ Student Loan Forgiveness Plan

Student loan forgiveness is not automatic; you must apply for these programs and meet certain eligibility requirements to qualify.

President Joe Biden has proposed several changes to student loan forgiveness as part of his education plan.

One of his proposals is to expand the Public Service Loan Forgiveness (PSLF) program. It currently allows borrowers who work in certain public service or non-profit jobs to have their student loans forgiven after making 120 on-time, full, scheduled monthly payments on their Direct Loans. President Biden’s plan would expand the PSLF program to cover all federal student loans, not just Direct Loans, and reduce the required payments from 120 to just 50.

Another proposal is to create a new “universal income-based repayment plan” for federal student loans, which would set monthly payments at a fixed percentage of borrowers’ income (similar to current income-driven repayment plans). Under this plan, borrowers would be eligible for student loan forgiveness after making 20 years of payments.

Please note that these proposals still need to be law, and it’s unclear if or when they would implement them. If you have student loans and are interested in student loan forgiveness, it’s a good idea to research the current programs and requirements and discuss your options with a student loan counselor or your servicer.