List of programs that forgive student loans
Have you ever longed for your outstanding student loans to just go away? Student loan debt is arguably one of the most significant financial crisis of modern times. Most of the former students are faced with huge amounts of debt and politicians have been looking for methods in which this issues could be solved. While there’s no way of immediately snapping your fingers and have that loan debt disappear magically, there are several ways in which the amount can be forgiven.
Federal student loans come with benefits that are not offered by many other types of loans. One of the most significant benefits is that they can qualify for loan forgiveness. In special scenarios, the federal government may opt to forgive part or your entire federal student loans. In this case, you will be no longer required to make your payments. Another benefit is that some situations may qualify you for a student loan discharge or cancellation. The most popular types of loan forgiveness or discharge include:
- Public Service Loan Forgiveness
- Teacher Loan Forgiveness
- Closed School Discharge
- Permanent Disability Discharge
How to get your student loans forgiven faster
Among the worst feelings is opening your paycheck and see your direct deposit enter your bank account only to discover that you require a huge portion of that money to clear our student loans list. The situation may seem to last forever. But it doesn’t have to. If you want to find relief for student loans, you will have to upgrade your strategy of student loan repayment.
One of the most convenient and easiest ways of reducing your debt is by making payments that are above the minimum requirement. You just need to take the payments you already have and add extra money. You need to have payments already set up so that any extra amount goes towards paying the principal. This can be easily achieved by setting up automatic payments which include the extra amounts. This will make it harder for you to think otherwise and change your mind.
You can also reduce the time taken to clear your student loan debt by establishing your payoff date. This is always a good place to start since by knowing this date, you will effectively work on bringing it closer. It is also advisable that you refinance your loans. The objective of refinancing is to lower the interest rates, hence more of your payments will be directed to clearing your student loans. By refinancing your student loans, you will have one consolidated loan having a single monthly payment.
Another method of paying your student loan faster is by using a cash windfall. These usually come in various forms that may include inheritance, winning a lottery, or even a settlement from an insurance claim or a lawsuit. When you get a massive chunk of money from such resources, you might be tempted to spend it. Therefore, instead of spending the money on things that you would ultimately forget, you can use the amount to pay off your student loan. You can as well look for jobs that forgive student loans. This is an effective method since it is basically free funds. You only have to meet the specific requirements that will get your loan forgiven. Furthermore, you can also opt to apply your raises especially if your employer offers annual raises as part of the compensation. While you totally deserve to get more stuff for your house, why not direct the additional income toward your student loan?
Who qualifies for student loans forgiveness program?
No one doesn’t wish to have their student loan debt wiped away. In fact, the number of individuals who say ‘I need help paying my student loans’ is ever increasing Loan forgiveness may appear too good to be true, but several legitimate ways can help you acquire it. Some debt relief companies claim to be effective in getting rid of student loans debt but do not entirely deliver even after charging struggling borrowers exorbitant upfront fees. You can only get the discharge through the numerous free-to-apply government programs. Qualifications for forgiveness of loans are only given to borrowers of federal student loans and is based on their repayment plan type or job.
Non profit organizations that help pay student loans
Teacher Loan Forgiveness – These are distinct programs that were designed specifically assist teachers by providing a principal reduction or a complete discharge to the disabled. If you have worked as a full-time teacher for five consecutive and complete academic years in a secondary school, elementary school or education institution, you may qualify for a maximum teacher loan forgiveness of $17,500 on your FFEL or Direct Loan program loans. This is an effective method to help with paying back student loans.
Public service loan forgiveness – if you get employed in a not-for-profit or government organization and pay your loans in terms of your income, you can qualify for student loan forgiveness after ten years of employment and payment. The national student loans debt forgiveness program cancels the remaining loan balance after making 120 qualifying monthly payments while working within a qualifying repayment plan for a qualifying employer. If you intend to qualify for this form of loan forgiveness, it is advisable that you fill and submit the employment certification form immediately. A lot of borrowers wait to submit this essential form until they have spent several years in the repayment before learning that they haven’t been making qualifying payments.
Income-based repayment – Here’s another method to use if you’re still wondering what to do with student loans. While it isn’t typically a form of forgiveness, you can have your student loans due forgiven in this program. Here, your loan payments will be capped at 10-15 percent charged on your income. The remaining amount after making regular payments under the system for a period of between 20-25 years will be forgiven. According to the current tax legislation, loans forgiven under this program are taxed like income. Bear in mind that when pursuing this forgiveness program, you will not be surprised by a huge tax bill. To be eligible for this repayment plan, your payments must be less than what you would pay with the Standard Repayment Plan.
You now don’t have to ask yourself the common question ‘how can I get student loans forgiven?” With all this knowledge, you definitely know what to do about student loans.