Everybody is always eager to have their student loans forgiven but not everyone knows how to apply for student loan forgiveness. We will quickly break down some of the most popular loan forgiveness programs, what their requirements are, and how to apply.
Public Service Loan Forgiveness
In short, this is considered one of the best federal loan forgiveness programs and it offers its borrowers complete loan forgiveness in return for their full-time work in public service. It is quite complicated so we’ll try to break it down to basics.
The main requirements are:
- to be employed full-time at a qualifying public service organization (federal, state or local government agency, entity or organization, federal, state or local non-profit organizations with a 501(c)(3) designation, military service, emergency management, public safety or law enforcement, public health services, public education or public library services, school library or other school-based services, public interest law services, early childhood education, public service for individuals with disabilities and public service for the elderly)
- to make 120 payments that are scheduled, in full and on time, monthly for ten years, starting the earliest from October 1st, 2007 under a qualifying repayment plan
- to have an outstanding balance on a Federal Student Loan received under the Direct Loan Program and notthe ones under the Family Education Loan (FFEL) Program, the Stafford Loan Program, the Perkins Loan Program, the Grad Plus Loans Program, or others Federal loan programs. If you have FFEL or Perkins Loan program, you can consolidate it. Learn more about a federal student loan consolidation.
How To Apply For Public Service Loan Forgiveness (PSLF)
Since you are first of all required to make 120 monthly payments you need to be employed for at least 10 years before you can receive forgiveness in this program. You can still apply prior to your ten years to receive confirmation if you are making qualifying payments for the PSLF program.
- Apply On Paper – You will need to mail this application to U.S. Department of Education, FedLoan Servicing, P.O. Box 69184, Harrisburg, PA 17106-9184. The easiest way to do the latter is to create an account on myfedloan.org and upload the form there.
- Apply Online – If your student loans are with Fedloan Servicing, you can submit your application online through their portal.
After that, wait for their further instructions about your status and eligibility or possible additional documentation.
Teacher Loan Forgiveness
If you are a highly qualified teacher and have been working for five consecutive academic years in a low-income school or educational service agency you may be eligible for this program. The forgiven amount could be either $5,000, or $17,500 depending on what you teach and at which grade level.
For the teacher loan forgiveness program, you should apply after you have taught five consecutive years with at least one year being at a title I school.
Search for more details on qualifying, low-income schools and other information about the teacher loan forgiveness program.
How To Apply For Teacher Loan Forgiveness
You need to complete and submit this application to your loan servicer (the certification section should be completed by your school’s chief administrative officer). You will need to contact your lender to find get the up-to-date and correct address on where to mail this form.
Teacher Cancellation for Perkins Loans
Some schools offer Federal Perkins Loans to their students in financial need. The students who took Perkins loan are eligible for Perkins loan cancellation program. The main condition is to be working as a teacher for minimum one year at a public elementary or secondary school as either a teacher in low-income schools, a special education teacher for children with disabilities or a teacher of Mathematics, Science, foreign languages, bilingual education or other fields that lack qualified teachers.
Low-income schools are the ones who qualify for Title I funds but you can see if your school really qualifies as low-income in the official online directory.
However, some private school teachers can qualify too. It’s the schools with nonprofit status that provide elementary or secondary education according to state laws.
If you meet all the requirements, 100% of your loan will eventually be cancelled with the benefit that the forgiveness is not taxable.
How To Apply For Teacher Cancellation for Perkins Loans
To apply for a discharge or cancellation of your Perkins Loans, you must apply to the school that made the loan originally or the schools Perkins Loan servicer. Your school would be able to provide the applications as well as instruct you on where to send them.
Income-Driven Repayment Plan Forgiveness
Student loan forgiveness also exists in the form of income-driven repayment(IDR) plans. These plans can be highly beneficial for many people by offering a low monthly payment with loan forgiveness at the end of the term.
According to the type of federal loan you can repay with it there are four income-driven repayment plans
- Revised Pay As You Earn (REPAYE) – Uses to 10% of your discretionary income to calculate your monthly payment and it may extend to 25 years if your loan was for graduate school or 20 years for undergraduate.
- Pay As You Earn (PAYE) – Your payment is also 10% of your discretionary income but never more than your potential payment under a standard repayment plan would be; it lasts for up to 20 years.
- Income-Based Repayment (IBR) – Payment also takes 10% of your income to calculate your payment and lasts 20 years for those who borrowed it after July 1st, 2014 or 15% for those who borrowed it after that date; it lasts for 25 years.
- Income-Contingent Repayment (ICR) – This plan your payment is either 20% of your income for up to 25 years or what you would pay with a fixed plan over 12 years- whichever is less.
If your loan is not paid off by the end of any of these plans, your balance will be forgiven but don’t forget that the forgiven amount can be taxable as income.
How To Apply For an Income-Driven Repayment Plan
- Apply Online – You can apply online for an IDR plan at StudentLoans.gov
- Apply On Paper – You can submit this form to your lender.
When applying for an IDR, be aware that you will need to prove your income to your lender, and you may also need to show your spouses income if you are married and file your taxes jointly.
If you are totally and permanently disabled you may be eligible for TPD discharge of your federal student loans. After you prove that you have mental or physical disability your debt will be removed completely. You can do so by providing service-related injury documentation from the Veteran Affairs office, a notice of award for SSDI or SSA with the next review in 5 years or more or a certified form from your physician.
Another requirement is that your disability is 60 or more months long or that it will result in death.
Remember that your discharged loans are taxable so a lot of permanently disabled people opt for loan consolidation under the Direct Loan Program which enables them to choose an income based program.
How To Apply For Disability Discharge
- Apply Online – You can apply online for disability discharge here.
- Apply On Paper – You can use this form to apply for disability discharge. Mail the form to the US Department of Education – TPD Servicing, P.O Box 87130, Lincoln, NE, 68501-7130
- You can also fax the form over to NelNet at (303)696-5250
After the death of the borrower, all federal student loans may be discharged. Also if the student’s parent dies and they had PLUS loan for their child, they will be discharged as it is also a federal loan. The same goes for Perkins Loans, Direct Subsidized and Unsubsidized Loans and Direct Consolidation loans.
However, private or cosigned student loans should be looked into more carefully as there are specific requirements for them. Some of them (Sallie Mae, New York’s Higher Education Services Corporation, Wells Fargo, and Discover) do offer discharge in case of death but the other private lenders will have some specifics you need to be aware of.
Also, depending on the type of loan you have it might be passed on to somebody else.
How To Apply For a Death Discharge
All that is necessary is to provide the proof of death to your loan servicer. The proof of death is an original or a certified copy of a death certificate.
Understanding How to Apply For Student Loan Forgiveness
Applying for student loan forgiveness is probably not as simple as it should be. There are many student loan forgiveness programs, and each of them need to be applied in different ways and to different servicers. We hope this article has helped make things more clear for you to be able to apply for the forgiveness you qualify for and deserve.