This fall, the Education Department will unveil rules for student loan forgiveness programs. Use our Loan Simulator to compare plans, estimate monthly payments and understand how much debt could be eliminated through such programs.
These programs range from income-driven repayment (IDR) forgiveness plans to specific avenues tailored to loan types, jobs or school situations. We will keep you updated on any updates to these programs.
Income-Driven Repayment
An expanded set of income-driven repayment options would prove useful to borrowers. Consolidating existing IDR plans could reduce confusion for borrowers and make implementation and communication with servicers simpler.
Recently, the administration also made an announcement regarding a change to IDR payments that will remove an upper cap on spouse income when applying and allow all borrowers to include their spouses’ earnings when making applications – this change will benefit millions of borrowers.
Additionally, ED will make a one-time account adjustment that credits past IDR payments, deferment periods and forbearance periods to loan forgiveness – this will benefit millions of borrowers who haven’t made full payments yet. Furthermore, they’ll review any borrowers in IDR for 20-25 years for possible forgiveness, an important step toward speedier forgiveness of student loans with initial balances under $12,000.
Public Service Loan Forgiveness
Once you’ve made 120 qualifying payments while working for either a government or 501c3 employer, your remaining balance can be forgiven under the Public Service Loan Forgiveness program. However, recent changes to PSLF has left many borrowers uncertain whether they still qualify – in this one-hour webinar presented by State of Oregon Student Loan Ombudsman Lane Thompson and Department of Education representative Mike Anderson will discuss changes made and what actions need to be taken now in order to count towards forgiveness in previous years.
To maximize loan forgiveness, borrowers should enroll in an Income-Driven Repayment plan immediately. Use the Federal Student Aid Office loan simulator tool to compare plans and find which is right for you; don’t forget about SAVE; it offers significantly reduced monthly bills for most undergraduate borrowers and allows loan forgiveness in only 10 years compared with 20-25 under traditional IDR plans!
Graduate Student Loan Forgiveness
Biden administration’s aim to expedite loan forgiveness for graduate student debt holders by changing SAVE plan rules to facilitate quicker loan forgiveness is also extended to help students who attended programs or schools that closed while they were enrolled, discharging their loans automatically.
Though these changes are good news for borrowers, it’s still essential to remember that PSLF and TLF remain the fastest ways of forgiving student loans quickly. Both programs can help borrowers who work for federal, state, city and local governments as well as certain non-profit organizations quickly eliminate their debt.
Income-driven repayment plans allow borrowers to have their student loan balances forgiven after 20 or 25 years of payments, depending on the loan type and plan chosen. Readers of Verify should monitor their monthly payments closely to gauge when these milestones will be reached.
Teacher Loan Forgiveness
Teacher loan forgiveness programs exist to encourage teachers who work in low-income areas to remain teaching for five consecutive years in qualifying schools, discharging any federal Direct Loans they owe as part of this initiative.
In order to qualify, your superintendent, human resources officer or principal must complete part of your application form and one letter from every school in which you worked during these five years must also be submitted. Please be aware that Public Service Loan Forgiveness payments don’t count toward teacher loan forgiveness programs like this one.
As well as federal loan forgiveness programs, many states also provide loan forgiveness options through state programs. To find these options quickly and easily, the American Federation of Teachers offers a searchable database. In some instances, both loan forgiveness programs can help. Any amount discharged or forgiven would count towards income for tax purposes and must be reported accordingly.
