How To Apply For Student Loan Forgiveness
Many programmes exist to help borrowers get out from under their student debt, but they all have their own set of requirements and application procedures. Find out what steps you need to take to get your student loans forgiven.
Some ways out of paying back student loans are:
- Public Service Loan Forgiveness
- Teacher Loan Forgiveness
- Loan Forgiveness for Volunteering
- Total and Permanent Disability Discharge
- Death Discharge
- Closed School Discharge
- Borrower Defense to Repayment Discharge
- False Certification Discharge
Unpaid Refund Discharge - Discharge after 20 or 25 years in an income-driven repayment plan
Some of your school loans may be discharged automatically. Borrowers must fill out an application for other types of student loan forgiveness. Call the Federal Student Aid Information Center at 1-800-4-FED-AID or get in touch with your loan servicer to request an application (1-800-433-3243).
The application process for loan cancellation is free of charge. There is no fee associated with getting aid with the loan forgiveness process.
Until the end of 2025, the American Taxpayer Relief Act of 2021 made it so that any discharge or cancellation of student debt would not result in a tax liability. The current law is likely to be renewed or made permanent before it expires.
What is Public Service Loan Forgiveness?
After 120 qualifying monthly payments in an eligible repayment plan and continuous employment in an eligible public service occupation, the borrower may have the outstanding balance of their eligible student loans forgiven.
The entire deficiency is cancelled, both interest and principal. Borrowers are entitled to a refund of any payments paid in excess of the required 120.
It is not necessary that the 120 qualifying payments be made in a row. Because borrowers cannot make 120 qualifying payments in fewer than 10 years, the time required to qualify is at least 10 years.
Loans with payments and interest suspended during the pandemic will be repaid in full.
Forgiveness may be granted to debtors who deferred or forbeared loan payments while performing active duty in the U.S. Armed Forces. For instance, a deferment for military service can be applied to PSLF.
Service in the public interest for a nonprofit organisation, working for a 501(c)(3) charity, or working directly for a government agency (not through a government contractor) are all examples of qualifying public service labour.
Borrowing from the William Davidson Federal Direct Loan Program qualifies (Direct Loans). Consolidating existing federal student loans into a single low-interest Federal Direct Consolidation Loan may be an option for those who would otherwise not qualify for financial aid. The Aid Summary tool, accessible at StudentAid.gov/aid-summary, allows borrowers to verify the sorts of loans they have been awarded.
Standard Repayment, along with the four income-driven repayment plans of Income-Contingent Repayment, Income-Based Repayment, Pay-As-You-Earn, and Revised Pay-As-You-Earn, are all acceptable options (REPAYE).
Eligible student loans repaid in a graduated or extended repayment plan may be discharged in full if the final year’s payments are at least as much as they would have been under an income-driven repayment plan, thanks to the Temporary Expanded Public Service Loan Forgiveness (TEPSLF) program’s $700 million in funding.
Borrowers can use the PSLF Help Tool at StudentAid.gov/PSLF to apply for PSLF and TEPSLF. Employer eligibility can be verified with this tool to ensure a loan is granted to a responsible party. This will make it possible for the borrower to apply for public service loan forgiveness and submit an Employment Certification Form (ECF). To keep track of qualifying payments and ensure continued eligibility for loan forgiveness, borrowers should submit an ECF annually and whenever they have a change in employment.
For a limited time (until October 31, 2022) all loan payments, regardless of programme or repayment plan, will be counted toward PSLF. The loan forgiveness process will take into account both late and partial payments. Before the deadline, borrowers must submit an Employment Certification Form (ECF) or they will not be eligible for debt cancellation. The waiver does not apply to federal Parent PLUS loans.
If a borrower consolidates their FFELP or Federal Perkins loans into a Federal Direct Consolidation Loan and then files an ECF or applies for loan forgiveness before the deadline, the monthly payments they make on those loans will count toward forgiveness. Do not put off consolidating your federal student loans because of the 45-day processing time. FFELP and Federal Perkins Loans should be reflected in the PSLF Help Tool by the end of the year.
What is Teacher Loan Forgiveness
To encourage graduates to enter the teaching profession, the federal government offers loan forgiveness of up to $17,500 for borrowers who teach full-time in low-income elementary or secondary schools (or educational service agencies) for a total of five years. FFELP and Direct Loans are also acceptable options.
Only new borrowers as of October 1, 1998 are eligible.
only the most qualified educators will be considered. The minimum requirements for a highly qualified teacher include a Bachelor’s degree, full state certification as a teacher, and permanent certification or licence. There is a state-mandated test for literacy, numeracy, and instruction that all elementary school teachers in the state must pass. Teachers at secondary schools must have either a major in the topic they are teaching, a graduate degree in the subject they are teaching, or be certified at a higher level in that field. State certification or licensing exams are one type of state test that can be quite demanding.
Up to $17,500 can be forgiven from the student loans of qualified math, science, and special education instructors. Alternative educators may qualify for a loan cancellation of up to $5,000.
The Teacher Loan Forgiveness programme can be combined with the Public Service Loan Forgiveness programme. However, it is not possible to participate in both loan forgiveness schemes for the same teaching service time.
Defaulting borrowers are not eligible unless they have established a mutually agreeable repayment plan with the loan holder.
Submit a Teacher Loan Forgiveness Application to your loan servicer(s) to apply for Teacher Loan Forgiveness. The certification portion of the application form must be filled out by the chief administrative officer of the school to the educational service agency.
Loan Forgiveness for Volunteering
AmeriCorps members are eligible for Segal AmeriCorps Education Awards, which can be used to pay back federal and state school loans. Awards are up to the maximum allowable amount of the Federal Pell Grant programme. The time limit for spending the financial aid is seven years. Award money for higher education might be given to a family member of a volunteer who is 55 or older.
After serving for two years, Peace Corps volunteers are eligible to receive a transfer payment (readjustment allowance) of more than $10,000.
Transitional payments and education awards can be used to pay down federal student debts. These one-time payments can be applied toward the yearly minimum of 120 eligible payments needed to get Public Service Loan Forgiveness.
Income-based repayment plans, however, could be more beneficial for some borrowers. Loan forgiveness for public service may be attained even with zero monthly payments. Full-time participation in either the AmeriCorps or the Peace Corps counts as paid work in a public service field.
The United States Department of Education provides Peace Corps volunteers with a manual on how to pay back their federal student loans.
Segal AmeriCorps Education Awardees can use the money to pay down their student debt through the My AmeriCorps website. Select “Create Education Award Payment Request,” then “Loan Payment” from the drop-down menu labelled “Payment Type.”
If a borrower has received an education award or transition payment and would like to use the funds toward Public Service Loan Forgiveness, they should get in touch with their loan servicer. When submitting an Employment Certification Form, be sure to include details about any transition payments you received and how much was used to pay off your student debts in one single sum (ECF). Be sure to specify that the money came from a Peace Corps transitional payment and that it should be used to PSLF.
Total and Permanent Disability Discharge
If the borrower can prove that they are totally and permanently disabled, then their federal student loans will be forgiven (TPD).
If the parent borrower becomes disabled, the Federal Parent PLUS loan can be discharged, but if the student becomes disabled, the debt cannot be released.
Total and permanent disability can be proven in three ways:
- Borrower has 100% debilitating service-connected disability, per VA’s assessment; borrower is unable to work.
- The next disability review will not occur for at least 5 years from the date of the most recent disability status determination from the Social Security Administration (SSA), guaranteeing that the borrower will continue to receive SSDI or SSI benefits.
- Borrower has a physical or mental handicap that has lasted or is likely to last at least 5 years, or is predicted to result in death, as certified by a U.S. doctor.
In order to determine which borrowers are entitled to a TPD discharge and have their federal school loans immediately forgiven, the U.S. Department of Education runs data matches with the VA and SSA.
The TPD Discharge Application requires the signature of the certifying physician in order to be processed.
Online at DisabilityDischarge.com, you can download a PDF version of the TPD Discharge Application. In addition to the printable PDF application, applicants can use the online Application Wizard. Send an email to disabilityinformation@nelnet.net, fax your request to 1-303-696-5250, or call 1-888-303-7818 to have an application addressed to you.
There is a three-year post-discharge monitoring period if the borrower’s loans are discharged due to a medical certification or a determination by SSA. If the debts are written off because of a VA determination, there is no waiting time after the discharge. While under post-discharge monitoring, borrowers cannot receive any new federal education loans or TEACH Grants and must maintain annual earnings from employment at or below 100% of the poverty line for a family of two. (There’s legislation in the works that would do away with follow-ups after patient release.)
Similar to the TPD discharge that is available on federal student loans, some private student loan providers offer a disability discharge. Get in touch with the bank and find out if they have a disability discharge programme. Check into the lender’s compassionate review procedure if a discharge due to incapacity is not offered.
Death Discharge
If the loan recipient dies while repaying a federal student loan, the balance of the debt is forgiven. In the event of the student’s death, federal Parent PLUS debts may also be forgiven.
Show the loan servicer documentation of death to receive a death discharge. A death certificate, either the original or a certified copy, can be used as proof of death.
If the borrower dies while still in school, several private lending companies forgive the remaining balance of the debt. If you want further information, talk to the bank. Inquire about a compassionate review from the lender if a death discharge is not available.
Close School Discharge
In the event that a student’s institution closes while they are enrolled or within 180 days of their withdrawal, they may be eligible for a closed school discharge of their federal education loans. This includes both federal student loans and federal parent PLUS loans.
The student is not eligible for the closed school discharge if they can finish their programme through a teach-out programme or at another college. A student may lose their eligibility for the closed school release if they transfer their credits to another university.
After verifying that the school is on the U.S. Department of Education’s list of closed schools, borrowers can request for a closed school discharge by submitting a Closed School Discharge Form to their loan servicer.
An alternative to a closed school discharge is the borrower defence to repayment discharge, which may be available even if the borrower is not eligible for a closed school discharge.
Students should research whether or not their home state has a tuition recovery fund or performance bond before applying for a loan.