Student Loan Forgiveness Programs
Higher education can prove expensive in the U.S. Several students resort to taking student loans. Apart from federal student loans, there are other types of loans too. Public and private financial institutions handle them. However, the loan amounts may vary, for lenders set limits on them. For instance, undergraduate students may require just about $5000+, whereas those going in for professional/master’s courses may require as much as $20,000+ every year.
Generally, lenders also work out repayment plans with the borrowers, and things do run smoothly. However, the Covid-19 crisis and resulting quarantines, downsizing, and rising unemployment have turned everything haywire. It has led to students pursuing diverse forgiveness programs. We detail some of the student loan forgiveness programs below.
Public Service Loan Forgiveness
A student, who had taken a federal loan, might have gained employment with a governmental organization, or even a non-profit establishment. If the borrower has made 120 qualifying loan repayments already, the lender will forgive the balance, tax-free.
Income-Driven Repayment Forgiveness
Four repayment plans come into play here, according to the federal government. The borrower has permission to cap repayments at a specific percentage of his/her monthly income. Eligibility for forgiveness begins 20-25 years from the date of the loan issue. Such an option proves beneficial for substantial loan balances.
Student Loan Forgiveness for Nurses
Nurses with student loans may try the NURSE Corps Loan Repayment Program, Public Service Loan Forgiveness (PSLF), or Perkins Loan Cancellation Program. The first has too many people hankering after it. Perkins Loans are not too popular. Therefore, the PSLF may be the best option. At least 85% of unpaid debts will receive forgiveness. Generally, lenders also work out repayment plans with the borrowers, and things do run smoothly. However, the Covid-19 crisis and resulting lockdowns, downsizing, and rising unemployment have turned everything haywire. It has led to students pursuing diverse forgiveness programs. We detail some of the student loan forgiveness programs below.
Teacher Loan Forgiveness
Many elementary or secondary public schools do not offer much of an income to their full-time teachers. Therefore, these fresh graduates may apply for forgiveness after five years of consecutive practice. However, they must have borrowed money only after October 1, 1998.
Federal Student Loan Forgiveness Programs
The eligibility criteria focus on profession and place of work. The student could be a licensed doctor, teacher, lawyer, or nurse. To illustrate, the state education department may repay $3,000 of a teacher’s loan annually.
Then again, students may have found employment in the Coast Guard, National Guard, Air Force, Army, or Navy. The forgiveness is quite high here, reaching up to $50,000.
LRAPs or loan repayment assistance programs are also available, specifically for those in public service professions.
CARES Act Higher Education Emergency Relief Fund-IHE/Student Aid
It offers funds to various institutions. In turn, these establishments take charge of distributing financial aid grants to students during emergencies. These emergencies include sudden disruptions in the student’s life, having to deal with overwhelming financial challenges, or struggling to survive. The borrowers may not contact the U.S. Department of Education directly. Instead, these institutions will peruse every student’s case separately. It enables them to decide eligibility criteria and fix the grant, and so on.
Any student who desires to take advantage of this Act must fill up an application form. Certain documents must accompany this application. The concerned institution may request some references/letters too.