Knowing how to qualify for student loan forgiveness depends largely on what kind of loan you took out. The U.S. Department of Education’s Federal Aid website offers a breakdown of different types of federal student loans. In most cases, you need a “qualified loan” to get into a student loan forgiveness program and get rid of student loan debt. A qualified loan is a basically a loan that you took out for yourself, your spouse or your dependent’s education that was incurred and provided during a specific time period for an eligible student.
How to Qualify for Student Loan Forgiveness
What is student loan forgiveness and who is eligible for student loan forgiveness? Student loan forgiveness programs help college graduates repay their federal student loans. You can qualify for federal student loan forgiveness only if you are current in making your student loan payments. There are a variety of student loan forgiveness programs, such as “income-based repayment plans” and “Pay As You Earn”, as well as the possibility of qualifying for deferments and forbearances. Which one you choose depends on what kind of federal student loan you took out, which I will discuss a little later.
If you have fallen behind on making your student loan payments and your loans are in default, then you will not be able to qualify for student loan forgiveness until your loan is in good standing. A student loan is considered in default when a payment has not been made in 270 days. At this point, you will probably start receiving debt collection calls from your loan servicer, such Educational Credit Management Corporation (ECMC), Performant Recovery, Navient, Great Lakes, or Phoenix Financial Services. Even if you have defaulted on a student loan, there are options to get rid of student loan debt. If you took out federal student loans and have gone into default, then your best option is usually getting into a federal student loan rehabilitation plan.
For instance, our client had $16,350 of federal student loans in default and received a notice from ECMC that her wages would be garnished as a result. With $15,000 in income per year, she didn’t have a lot of options. We got her into an ECMC Loan Rehabilitation Program where she will only pay $5 per month for 9 months. Once those payments are made, her loan will be considered current and out of default. So, for just $45 over a 9-month period, she is now qualified for student loan forgiveness programs, the negative marks on her credit will be removed, and she is eligible for deferments and forbearances.
Private student loan forgiveness programs are not available from the federal government. Many people have both federal and private student loans. If your private loans have fallen into default, then a debt settlement is often your best option to get out of student loan debt. Visit my student loan debt relief success story page to learn more about people who have overcome their student loan debt.
Tips for Student Loan Forgiveness
As I mentioned earlier, the ways to get student loans forgiven depend in large part to what kind of student loan you took out. For instance, there are specific student loan forgiveness programs for teachers, such as the Perkins Cancellation for Teachers. The first step to qualify for federal student loan forgiveness is to consolidate your qualified loan. You can read more about each of the federal forgiveness program for student loans on the U.S. Department of Education’s website.
List of student loan forgiveness programs:
- Standard Repayment Plan
- Graduated Repayment Plan
- Extended Repayment Plan
- Income Contingent Plan
- Income-Based Repayment Plan
- Pay as You Earn (PAYE)
- Revised Pay As You Earn
- Income-Sensitive Repayment Plan
If you work in public service, you may qualify for the Public Service Loan Forgiveness (PSLF) Program. Under this plan you must work in public service and have made 120 qualifying monthly payments under one of the above-mentioned repayment plans while working full time for a qualifying employer. At the time this blog was written, the Dept. of Education issued the following “alert” on its website”:
The Consolidated Appropriations Act, 2018 provided limited, additional conditions under which a borrower may become eligible for loan forgiveness if some or all of the payments made by the borrower do not qualify under current requirements for Public Service Loan Forgiveness (PSLF). The U.S. Department of Education is assessing the newly enacted law and will explain the new forgiveness conditions to customers on this page as soon as more details are available. We encourage you to check back periodically.
Lower Debt with Student Loan Forgiveness
Lowering your debt in a student loan forgiveness program can only happen if you have been making your student loan payments on time and your loans are in good standing. If you are in default, then contact a student loan lawyer for debt help who offers a free consultation. You should never pay for advice up front. Beware of those making money off the student loan debt crisis. There is a lot of misinformation out there and student loan debt can be a complicated matter. For example, our client owed over $15,019 on a federal student loan that made its way back to the Dept. of Education due to non-payment and a Chapter 13 bankruptcy that lasted over a period of 5 years. The federal student loan, however, survived the bankruptcy. The Dept. of Education sent the account to Performant Recovery to collect the debt. We negotiated a debt settlement with them for $8,000. Federal student loans really can haunt you for life. The Dept. of Education can garnish your wages and intercept tax returns to repay the debt.
Navigating through the federal student loan forgiveness process can be daunting, but with the right counseling and guidance then you can starting getting rid of your student loan debt. Our client had approximately $94,000 in federal student loans and private student loans. She could no longer afford the payments on both. After going through her income and expenses, we determined that she would likely qualify for an income-based repayment plan on her Federal Student Loans. We contacted her lender and were able to reduce her federal student loan payment down to $25 per month for the next 12 months. She plans on re-applying for this repayment plan every year and can now afford to also make her private student loan payments.
Help with Student Loan Forgiveness
If you are looking for a student loan lawyer, then make sure you find someone with a proven track record of getting people out of student loan debt. If you need help making your way through the federal student loan forgiveness programs, if you have fallen behind on student loan payments or if your loan is in default – then give me a call at 858-217-5051. I offer a free student loan debt consultation to go over your particular situation and get you on the road to no more student debt.
Daniel R. Gamez, an attorney focusing exclusively in debt relief, is licensed to practice in all state and federal courts in California and Texas. Mr. Gamez owns and operates the Gamez Law Firm in San Diego and Los Angeles, California. For more information, please contact Daniel Gamez at 858-217-5051, daniel@gamezl