Author: it-teaam

What Donald Trump Means for Your Student Loans
The presidential election is heating up and the outcome could have significant impact on your student loans. If you have federal student loans, private student loans or both, the winner in November could affect how you approach student loan repayment.If President Donald Trump is re-elected, here’s what it could mean for your student loans:
Student Loan Repayment

Trump has proposed to simplify income-driven repayment plans for your federal student loans. Specifically, Trump would combine the current income-driven repayment plans into a single income-driven repayment plan. Why? Trump wants to simplify student loan repayment and reduce complexity for student loan borrowers.

Trump also would change the way that income-driven repayment works:

Monthly Repayment: Borrowers would pay 12.5% of discretionary income each month. This compares to current income-driven repayment plans that require 10-20% of monthly discretionary income.

Student Loan Forgiveness:Like current income-driven repayment plans, Trump supports student loan forgiveness for borrowers. However, he would change the time it takes to receive student loan forgiveness. For example, if you have undergraduate student loans, you could get student loan forgiveness after 15 years of on-time monthly payments (compared to 20 years today). For graduate student loans, you could get student loan forgiveness after 30 years (compared to 25 years under current income-driven repayment plans).

One challenge of income-driven repayment plans is that borrowers must enroll and then recertify income each year. Trump primarily would keep this provision the same, although some borrowers who are delinquent on student loan payments could be enrolled automatically.

Cancel Student Loans

Will Trump cancel student loans? It’s unlikely. Trump has not supported various proposals in Congress to cancel student loan debt. For example, Sen. Bernie Sanders (I-VT) proposed to cancel all student loan debt, including both private and federal student loans. Sen. Elizabeth Warren (D-MA) proposed to cancel student loans for 95% of Americans, plus a plan to cancel $50,000 of student loans. Senate Democrats proposed to cancel $10,000 of student loans, while House Democrats proposed $30,000 of student loan forgiveness. Despite these proposals, Trump has not supported outright student loan debt cancellation.

Student Loan Forgiveness

Trump supports student loan forgiveness through income-driven repayment plans. However, he proposed to eliminate the Public Service Loan Forgiveness program, which is a federal program to forgive federal student loans for borrowers who work full-time for a qualified public service or non-profit employer and who make 120 on-time monthly student loan payments and meet other requirements. In comparison, Trump’s student loan forgiveness plan would forgive undergraduate student loans after 15 years (compared to 10 years under the Public Service Loan Forgiveness program).

Student Loan Debt Relief

Trump has demonstrated his willingness to use executive orders for student loan relief. For example, in response to the Covid-19 pandemic, he:
- Paused federal student loan payments
- Stopped interest accrual on federal student loans
- Halted student loan debt collection for federal student loans
Trump initially enacted these measures for 60 days. Congress extended these student loan benefits for six months. Trump then extended this student loan relief for another three months through December 31, 2020.

End Subsidized Student Loans

For new student loan borrowers, Trump proposed the elimination of subsidized federal student loans. Subsidized student loans mean that the federal government pays your interest while you are enrolled in school. This helps save you money until you graduate or leave school. In contrast, unsubsidized student loans start accruing interest once they are disbursed. Under Trump’s plan, federal subsidized student loans would be eliminated, so borrowers would borrow unsubsidized federal student loans.

Limit Student Loan Borrowing

“How much can I borrow in student loans” is a popular question among student loan borrowers. According to the latest student loan debt statistics, 45 million student loan borrowers collectively owe $1.6 trillion of student loan debt. To limit the amount of student loans, Trump would limit the amount of Parent PLUS Loans and PLUS Loans for graduate school. Parent PLUS Loans are federal student loans that parents borrow to fund their dependent child’s education. PLUS Loans also can be used to pay for graduate school. Under Trump’s plan:

Parent PLUS Loans: Borrowers would be able to borrow up to $26,500 of Parent PLUS Loans.

PLUS Loans: Borrowers could borrow up to $50,000 per year for PLUS Loans for graduate school, with a maximum lifetime total of $100,000.
November 10, 2020
12 Student Loan Forgiveness Programs to Cancel Student Loan Debt
How do you cancel student loan debt? The good news is that you can get student loan forgiveness through several different programs. Most programs are available for federal student loans, but not for private student loans. Contact your student loan servicer to discuss federal student loan forgiveness. That said, if you have private student loans, contact your student loan servicer to explore options.

Here are some programs for you to consider:
Student Loan Forgiveness Programs

1. Income-Driven Repayment Plans

Income-driven repayment plans offer student loan forgiveness for your federal student loans. To get student loan forgiveness, you must make monthly student loan payments for 20 years (undergraduate student loans) or 25 years (graduate student loans). Your student loan payments must be on-time and in full. If you have lower income and a higher student loan balance, an income driven repayment plan such as IBR, PAYE, REPAYE or ICR may benefit you.

2. Public Service Loan Forgiveness

The Public Service Loan Forgiveness program is a federal student loan forgiveness program that is available to borrowers who work full-time (at least 30 hours a week) for a qualified public service or non-profit employer. There are many requirements to satisfy to cancel student loan debt, including making 120 monthly student loan payments on-time and in full. You must make a majority of your monthly paymentswhile enrolled in an income-driven repayment plan. Importantly, only Direct Loans are eligible for public service loan forgiveness. If you have FFELP or Perkins Loans, for example, consolidate these student loans into a Direct Consolidation Loan.

3. Teacher Loan Forgiveness

The Teacher Loan Forgiveness program is available to teachers who are employed full-time in low income public elementary and secondary schools. To qualify, teachers must work at least five consecutive years and can receive up to $17,500 of student loan forgiveness. Teacher Loan Forgiveness applies only to federal student loans, including Direct Loans.

4. Military Student Loan Forgiveness

If you serve in the U.S. Armed Forces, including the Army, Navy, Air Force, Marines, Coast Guard and National Guard, you may qualify for up to $50,000 of student loan forgiveness. Through the Student Loan Repayment Program, you could have at least some of your federal student loans forgiven.

5. State Student Loan Forgiveness Programs

Most major federal student loan forgiveness program are offered through the federal government. However, your state may offer student loan relief too. Contact your state’s Department of Education for more details on programs to cancel student loan debt or help with student loan repayment.

6. Student Loan Repayment Assistance

Many states and organizations offer student loan repayment assistance to student loan borrowers. If you work in public service, including as a doctor or lawyer, for example, you may eligible to receive annual help with your student loans. Known as LRAPS, these programs are separate from Public Service Loan Forgiveness program, which is a federal program.

Cancel student loan debt

7. Perkins Loans

It’s possible to cancel Perkins Loans. If you have Perkins Loans, you can get up to 100% of your Perkins Loans if you work in public service for at least five years.

8. Cancel Student Loans

There are currently no plans to cancel all your student loan debt. Senator Bernie Sanders (I-VT) proposed to cancel all federal student loans and private student loan debt. Other proposals in Congress have called for student loan forgiveness for up to $50,000 of student loan debt. Senate Democrats have called for $10,000 of student loan forgiveness debt forgiveness. If they become law, these partial student loan forgiveness proposals to cancel student loan debt may forgive federal student loans, private student loans or both.

Student Loan Forgiveness Programs

There are several options to discharge student loans. Student loan discharge is different than student loan forgiveness. Based on these specific circumstances, it’s possible to have immediate student loan forgiveness in these situations:

9. Total and Permanent Disability

If you are disabled permanently, including either mentally or physically, and are unable to work, you may be eligible to have your federal student loans discharged. You can learn more at disabilitydischarge.com, including the requirements and what supporting documentation is needed. For private student loans, contact your lender or student loan servicer to inquire about discharge options for total and permanent disability. If you are a veteran, your federal student loan debt is discharged automatically if you have a total and permanent disability.

10. Borrower Defense to Repayment

Borrower defense to repayment is a rule initiated under the Obama administration that student loan borrowers can use a reason for discharge if they were defrauded by their school. You can file a borrower defense to repayment claim with the U.S. Department of Education, although the U.S. Department of Education has discretion to approve your claim to discharge your student loans.

11. School Closes

If your school closes while you are enrolled, you may be eligible for student loan discharge for your federal student loans. You can apply through your student loan servicer. To qualify, you must be enrolled or recently enrolled within 120 days and did not receive a degree. Make sure to keep making student loan payment while your application is processed and until approved.

12. Death

If you die, your student loans will be discharged. A death certificate must be submitted to your student loan servicer to discharge your federal student loans. It’s also possible to get Parent PLUS forgiveness. Parent PLUS Loans are also discharged at death, if your parent borrowed a Parent PLUS Loan.
November 8, 2020
Best Advice to Pay off Student Loans
We asked the experts at Mentor Money for their best advice on how to pay off student loans. According to Mentor Money, the latest student loan debt statistics show that 45 million borrowers collectively owe more than $1.7 trillion. On average, that’s about $30,000 per student loan borrower. What’s the best way to pay off student loans?

[refinance_student_loans_table]

Here’s the best advice to pay off student loans:
Always pay at least the minimum payment

When it comes to student loan repayment, always make sure to pay at least the minimum payment each month. This helps ensure that you make full, on-time payments. If you skip or miss student loan payments, your credit score can be adversely impacted. By paying the minimum payment, you will keep current on your student loan payments.

Enroll in autopay

Enroll in autopay to ensure automatic withdrawals to pay your student loans each month. Contact your student loan lender for details how to link your bank account to your student loan account. Some lenders may offer you a 0.25% interest rate reduction when you enroll in autopay. For example, if your student loan interest rate is 7.5%, your interest rate may be decreased to 7.25%, or a 0.25% discount, when you enroll in autopay.

Make extra student loan payments

The minimum payment is only the least amount you should pay each month for your student loans. However, you can pay a higher amount or pay more frequently. Why would you pay more money than required? The reason you make extra student loan payments or higher student loan payments is to save money on interest and reduce your principal balance.

This extra student loan payment calculator shows you how much money you can save when you make an extra student loan payment.

Sign up for an income-driven repayment plan

If you have federal student loans, one option is to enroll in income-driven repayment plans. If you are struggling to repay student loans, an income-driven repayment plan bases your monthly student loan payment on your discretionary income, family size and state of residence. There are four main types of income-driven repayment plans:
- Income-Based Repayment (IBR)
- Pay As You Earn (PAYE)
- Revised Pay As You Earn (REPAYE)
- Income-Contingent Repayment (ICR)
If you make full, on-time monthly payments for 20 years (undergraduate student loans) or 25 years (graduate student loans), you could receive student loan forgiveness.

Refinance student loans

Student loan refinancing helps you get a lower interest rate, save money and pay off student loans faster. You can refinance federal student loans, private student loans or both. With student loan refinancing, you can choose a fixed or variable interest rate as well as your loan term, which can range from five to 20 years. A lower interest rate means you can save money on interest. To qualify, you need a credit score of at least 650, recurring monthly income and enough cash flow for living expenses and debt repayment.

This student loan refinancing calculator shows you how much money you can save with student loan refinancing.

Pay off your highest interest rate loans first

After you make your minimum monthly payment, you can make an extra payment on your highest interest rate loan. Why? Don’t focus on your loan balance; focus on you interest rate. Your goal should be to pay off the highest interest rate loan first to limit the accrual of interest.

Pay off your smallest student loan balance first

With this strategy, start by making the minimum monthly payment. As an alternative to paying off the highest interest rate loan first, you could pay off your smallest student loan balance first. Why? Pay off the smallest balance first to build momentum. Start with the smallest loan balance, and once you pay it off, you can move to repay the next highest student loan balance. Continue to build more momentum as you pay off each loan.

Use extra cash to pay off student loans

If you have any extra cash – from a bonus, tax refund, inheritance or any other sources – consider making a lump-sum student loan payment.

This lump-sum student loan repayment calculator shows how much money you can save.

Make payments while in school

Get ahead of your student loan payments while you’re in school. Unsubsidized student loans begin to accrue interest while you’re in school. You’re not required to make student loan payments while you’re in school. However, if you are able to start making payments while you’re a student, consider making payments of any amount to reduce principal and save money on interest.

[related_posts post_1=’2937′ post_2=’321′ post_3=’318′]
November 5, 2020
Student Loans: You May Owe Taxes on Student Loan Forgiveness
If you get student loan forgiveness, it’s possible that you may owe income tax on the amount of student loans you get forgiven. Here’s what you should know about student loan forgiveness and taxes, and how you can manage your student loans accordingly.

Will I owe taxes on student loan forgiveness?

“Will I owe taxes on student loan forgiveness?” is a popular question about student loans. The answer depends whether you receive student loan forgiveness through an income-driven repayment plan. An income-driven repayment plan is a student loan repayment plan offered by the federal government that sets your monthly payment based on your discretionary income, family size and state of residence. There are four main income-driven repayment plans:
- Income-Based Repayment (IBR)
- Pay As You Earn (PAYE)
- Revised Pay As You Earn (REPAYE)
- Income-Contingent Repayment (ICR)
These income-driven repayment plans offer student loan forgiveness on your federal student loans after 20 years for undergraduate student loans and 25 years for graduate school student loans. When you get student loan forgiveness, you would owe income tax on the amount of student loans that ultimately are forgiven.

How not to pay taxes on student loan forgiveness

Many borrowers will not pay income tax when they get student loan forgiveness. Here are some examples:
- Public Service Loan Forgiveness. The Public Service Loan Forgiveness will cancel student loan debt, and you won’t owe any income tax.
- Teacher Loan Forgiveness. The Teacher Loan Forgiveness also won’t charge you any income tax on the amount of student loans that are forgiven.
- Total and Permanent Disability. If you have federal student loans and become totally and permanently disabled, your student debt can be cancelled and you won’t owe income tax.
- Student Loan Discharge.Through the borrower defense to repayment rule, your student loans can be discharged if your school closed or you were the victim of fraud.
Student loan forgiveness: What will I owe in taxes?

Here’s how student loan forgiveness can affect your income taxes. Under an income-driven repayment plan, you will pay on-time and in-full each month for 20 or 25 years. At the end of the repayment plan, you will have a final student loan balance that will be forgiven. The amount of that student loan balance is taxable to you, the borrower. The amount of tax you owe can be found by multiplying your income tax rate by your final student loan balance. So, if your final student loan balance is $10,000 and your income tax rate is 30%, you would owe $10,000 * 30%, or $3,000 in income tax.

Your personal tax situation may be unique, which can impact how much tax you owe. For example, you may have deductions, credits or other offsets that could impact the final amount of tax you pay when your student loans are forgiven.

How to manage student loan forgiveness

If you have an income-driven repayment plan, don’t think you won’t owe income taxes. Therefore, you must plan in advance. Here are a few action steps to take:
- Choose the right repayment plan. The income-driven repayment plan you choose can impact the amount of tax you may owe. Consider the amount of your monthly payment too. The lower your monthly payment, it’s possible that more interest accrues on your student loan balance. Therefore, you could save money upfront, but you may have a relatively larger final student loan balance. That could potentially mean more income tax liability. Review the income-driven repayment plans to choose the best plan for you.
- Save money. If you have student loans, it may sound counter-intuitive to save money. After all, you may be spending much of your income paying student loans. However, you likely may owe income tax on your student loan balance after 20 or 25 years. Therefore, save enough money to pay your tax bill so you’re not surprised.
October 25, 2020
How to Get Student Loan Relief During COVID-19
Coronavirus has had a major impact on your student loans, including student loan repayment. The good news is that the federal government and private lenders offer student loan relief to help you through the Covid-19 pandemic.

Here are some options for student loan relief:

Federal Student Loans: Student Loan Relief

In March, Congress passed the Cares Act, a $2.2 trillion financial stimulus bill, that provided economic support, including for federal student loans:
- Pause federal student loan payments
- Waive interest on federal student loans
- Halt collection of student loans in default
Importantly, this student loan relief is temporary in response to Coronavirus. Under the Cares Act, student loan relief lasted from March through September 30, 2020. However, President Donald Trump extended this student loan relief through December 31, 2020. Effectively, this means that you are not required to make federal student loan payments during this period. That said, you can still pay your federal student loans in the normal course. Further, no new interest accrues on your student loans. Finally, if you are in student loan default, your income tax refund, Social Security payment or wages cannot be garnished or seized to pay off student loans. This period may be a good time for you to get out of student loan default.

Does student loan relief include all federal student loans?

This student loan relief does not include all federal student loans. The Cares Act specified that only federal student loans owned by the U.S. Department of Education are covered. This means that Direct Loans are covered, but FFELP Loans or Perkins Loans do not. Why? FFELP loans are federal student loans that were issued by private financial institutions such as banks and are typically owned by the federal government. Similarly, Perkins Loans are owned by colleges and universities. Therefore, if you have FFELP Loans or Perkins Loans, they are not covered under this student loan relief.

Is student loan forbearance automatic?

Yes, student loan forbearance due to Coronavirus is automatic. Therefore, you don’t need to register for this temporary student loan relief.

Can I still make student loan payments during Coronavirus?

Yes, you can still make student loan payments during Coronavirus. Even if your federal student loans are in temporary forbearance, you can make student loan payments as often and as much as you would like. Since no interest accrues on your federal student loans, it’s possible to pay off student loans faster because more of your student loan payment can reduce your principal balance.

Who do I contact if I have questions about student loan forbearance?

Contact your student loan servicer, which is the company where you send student loan payments. Your student loan servicer can answer your questions and discuss alternative options, including income-driven repayment plans. You also can contact Federal Student Aid, which is part of the U.S. Department of Education.

Private Student Loans: Student Loan Relief

While the Cares Act only applies to federal student loans, many private lenders are offering student loan forbearance that is similar to federal student loan relief. For example, some private lenders will postpone student loan payments for up to 12 months.

However, unlike federal student loans, interest will still accrue on your private student loans during this period. Other lenders offer student loan relief on a case-by-case basis.

Contact your lender to learn more about potential student loan relief options.

Student Loan Refinancing

Should I refinance student loans during Coronavirus? It’s a popular question that student loan borrowers ask.

Student loan refinancing is another option during Coronavirus. Student loan refinancing helps you save money, get a lower interest rate and pay off student loans faster. You can refinance private student loans, federal student loans or both.

Should you refinance federal student loans during Coronavirus?

The choice to refinance student loans is unique to your personal goals and circumstances. Since federal student loans are paused temporarily, some borrowers prefer to benefit from student loan forbearance and refinance private student loans only. Other borrowers, however, recognize that student loan forbearance is temporary, and don’t want to pay their regular interest rate when student loan relief ends. Therefore, these borrowers prefer to refinance both their federal and private student loans to lock-in a lower interest rate.

Student Loan Relief: States

Several states have entered into agreements with certain student loan servicers to provide student loan relief separate from the Cares Act. This is a 90-day forbearance that applies to private student loans and commercially-held federal student loans such as FFELP Loans, for example. This forbearance is not automatic, so you must contact your student loan servicer to request this forbearance. Some student loan servicers have waived late fees and are not making negative credit reports to credit bureaus during this period. Student loan relief may be available in states such as California, Colorado, Connecticut, Illinois, Massachusetts, New Jersey, New York, Vermont Virginia and Washington.

Contact your student loan servicer for more details.

Student Loan Forgiveness: Coronavirus

If you want to explore potential options to cancel student loan debt during Covid-19, there are options. Most student loan forgiveness programs apply to your federal student loans and are through the federal government. Your student loan servicer can provide more information on potential options. Student loan forgiveness is offered through income-driven repayment plans, the Public Service Loan Forgiveness program and Teacher Loan Forgiveness program, for example. That said, there is no immediate plan from Congress to cancel all student loan debt.

Final Perspective: Student Loan Relief

Your student loan servicer can help you with income-driven repayment plans, student loan payment questions and student loan forbearance, for example. Contact your student loan servicer to discuss potential options. Student loan refinancing is a separate process with individual lenders. During Coronavirus, it’s important to understand all your options so you can make an informed decision to manage and pay off student loans in the best way possible.
October 23, 2020
What Is Student Loan Default and How to Get Out of Student Loan Default
If you have experienced student loan default, you’re not alone. According to the U.S. Department of Education, approximately 11% of student loan borrowers have defaulted on their federal student loans. With private student loans, that student loan debt statistic may be even higher.

Covid-19 has impacted student loans and the economy, which has caused many borrowers to struggle to make student loan payments. While federal student loan payments and student loan debt collection currently are paused due to Coronavirus, the good news is that there are several ways to get out of student loan default.

What is student loan default?

If your student loans are in default, this means that you did not make student loan payments for a certain period of time. For example:

Federal student loans: You default on your federal student loans when you don’t make student loan payments for at least 270 days, which is approximately nine months.

Private student loans: Private student loan default can vary based on your promissory note. Typically, default occurs after three missed payments, or approximately 120 days. Check with your lender or student loan servicer to determine how your promissory note for your private student loans defines default.

Remember this: Student default is different than student loan delinquency. Student loan delinquency means that your student loans are at least 90 days past due.

How to know if your student loans are in default

How do you know if your student loans are in default? There are three main ways to determine if your student loans are in default:
1. Student Loan Servicer: Check with your student loan servicer, which is the company or entity to whom you send your student loan payments.
2. Federal Student Aid: Login to your Federal Student Aid (FSA) account to check your federal student loan repayment status. Through FSA, you can check the repayment status of each student loan you have.
3. Credit Report: You can check your credit report to access both your private student loans and federal student loans. Visit annualcreditreport.com for a free copy of your credit report.
What happens if I default on my student loans?

One popular question that many borrowers ask is this: “What happens if I default on my student loans?” There are several potential consequences, including:
- You may be sued in court by your lender.
- Your lender could garnish your wages.
- Your lender could garnish your Social Security payments.
- Your lender could garnish your income tax refund.
- Your credit score may be adversely impacted.
- You may not be able to borrow additional student loans.
- You may be subject to late fees and penalties.
Importantly, student loan default is treated differently depending if you have federal student loans or private student loans. The federal government may garnish your wages, seize your Social Security checks or take your tax refund to satisfy your student loan payments in default. In comparison, private lenders can’t seize your Social Security payments or income tax refund. However, a private lender could, with a court judgment, garnish your wages.

How to get out of student loan default

If you want to know how to get out of default, there are three main ways with federal student loans. If you are in student default for private student loans, contact your lender to discuss options. For federal student loans, here are the three major options:
1. Student loan debt rehabilitation
2. Student loan consolidation
3. Student loan repayment
Student Loan Debt Rehabilitation

Yes, it’s possible to rehabilitate your student loans through a process called student loan rehabilitation. Student loan rehabilitation enables you to make nine monthly student loan payments within 10 months. While you may request a lower amount, the standard monthly payment under student loan rehabilitation is 15% of your discretionary income.

You also have the option to enroll in an income-driven repayment. An income-driven repayment plan can help you get a lower student loan payment. If you successfully rehabilitate your student loans, your default will be removed from your credit report.

Student Loan Consolidation

Student loan consolidation is another strategy to get out of default. To consolidate student loans, you can:
- Make three on-time, full and consecutive student loan payments on the defaulted student loans; and
- Pay the remainder of your student loans under an income-driven repayment plan.
Unlike student loan rehabilitation, student loan consolidation doesn’t remove the default from your credit report. However, student loan consolidation is a fast way to get out of student loan default quickly since it only takes three monthly payments.

Student Loan Repayment

When your student loans are in default, a third option is to pay off your student loans. If your student loans are in default, however, it’s unlikely that you may have enough money to pay off your student loans. So, this option may be expensive, but it’s also possible to negotiate a student loan settlement.
October 21, 2020
Here Are 5 Ways to Get Student Loan Forgiveness and Cancel Student Loan Debt
In the wake of the Covid-19 pandemic, student loan borrowers have asked the same question “How can I cancel my student loan debt?” Here are 5 ways to get student loan forgiveness and student loan debt cancellation.

Coronavirus has changed the economic landscape, and this includes student loans. If you are struggling to pay off student loans, there are several options to get your student loans forgiven. It’s important to understand each option, weigh the advantages and disadvantages and determine if student loan forgiveness is the right choice for you. Importantly, for most borrowers, no program simply will cancel your student loan debt. In most cases, there are requirements to meet to receive student loan forgiveness.

In recent months, Congress has proposed to cancel student loan debt. For example, Sen. Bernie Sanders (I-VT) proposed to cancel all $1.6 trillion of student loan debt, including federal and private student loans. House Democrats proposed cancelling $30,000 of student loan debt, while Senate Democrats proposed $10,000 of student loan forgiveness.

Last month, Sen. Elizabeth Warren (D-MA) and Senate Minority Chuck Schumer (D-NY) proposed that President Donald Trump be granted authority to cancel $50,000 of student loan debt. Despite these proposals, Congress has not passed comprehensive student loan forgiveness this year. That said, there are existing programs that help provide student loan relief to borrowers.

Here is an overview of some of the most popular ways to get student loan forgiveness:

1. Public Service Loan Forgiveness

Congress created the Public Service Loan Forgiveness program in 2007 to help student loan borrowers receive federal student loan forgiveness. To qualify, borrowers must meet several requirements, including full-time work of at least 30 hours per week for a qualified non-profit or public service employer.

To get public service loan forgiveness, you must make 120 monthly payments on-time and in-full. Further, you must be enrolled in an income-driven repayment plan and make a majority of your monthly payments while enrolled in an income-driven repayment plan. It’s important to note that you can receive forgiveness only for federal student loans, not private student loans.

2. Income-Driven Repayment Plans

Income-driven repayment plans are another excellent opportunity to receive federal student loan forgiveness. You can enroll in an income-driven repayment through your student loan servicer and these plans are available for federal student loans only. Income-driven repayment plans are based on your discretionary income, family size and state of residence.

There are four main types of income-driven repayment plans:
With income-driven repayment, your monthly student loan payment is equal to 10-20% of your monthly discretionary income. It’s possible for your monthly payment to be as low as $0. After 20 years (undergraduate student loans) or 25 years (graduate student loans), you can receive federal student loan forgiveness.

However, you may owe income taxes on the amount of student loan forgiveness you receive. For example, if you student loan balance is $25,000 after 20 years of paying college loans, then you may owe income tax on your $25,000 student loan balance.

3. Teacher Loan Forgiveness

Teachers can seek federal student loan forgiveness through the Public Service Loan Forgiveness, or they can pursue Teacher Loan Forgiveness. There are many requirements to meet, including teaching full-time for five complete and consecutive years.

In contrast, public service loan forgiveness doesn’t require consecutive monthly payments. For Teacher Loan Forgiveness, you must teach in a low-income school or educational service agency. While public service loan forgiveness can cancel your student loan debt, Teacher Loan Forgiveness only cancels up to $17,500 for subsidized and unsubsidized Direct and Stafford Loans.

If you have Parent PLUS Loans, for example, you should consolidate these student loans into a Direct Consolidation Loan before making student loan payments that count toward the 120 monthly payments while enrolled in an income-driven repayment plan. You can contact your student loan servicer to start the process.

4. Bankruptcy

For many student loan borrowers, bankruptcy is a last resort. Most borrowers believe that you can’t discharge student loans in bankruptcy, even though you can discharge mortgage debt or credit card debt. However, in specific circumstances, some borrowers may qualify for bankruptcy based on economic hardship and successfully can cancel student loan debt. While the legal standard to discharge student loans in bankruptcy varies by circuit court, the most common legal standard is known as the Brunner Test. To discharge student loans under the Brunner Test, a student loan borrower must show:
- A financial hardship
- The hardship is likely to continue for the duration of the loan term; and
- They made a good faith attempt to pay off the student loan (even if the borrower does not pay off the loan)
5. Total and Permanent Disability

If you are totally and permanently disabled, you can cancel your federal student loan debt through the federal government with a Total and Permanent Disability (TPD) Discharge. To apply, call 888-303-7818 or email DisabilityInformation@Nelnet.net.

Nelnet is the student loan servicer that manages Total and Permanent Disability for federal student loans on behalf of the U.S. Department of Education. For private student loans, contact your lender or student loan servicer to inquire whether it’s possible to obtain a total and permanent disability discharge.

Final Thoughts

There are many different ways to receive student loan forgiveness and cancel student loan debt. The first step is to learn more about student loan forgiveness options and then contact your student loan servicer once you’re ready to proceed.

If you don’t want to wait several years for student loan forgiveness, you could refinance student loans now, including both private student loans and federal student loans, to get a lower interest rate and pay off student loans faster.
October 19, 2020
Should I Refinance Student Loans During Coronavirus?

October 18, 2020
How to Contact Student Loan Companies During COVID-19
You may be wondering how to contact student loan companies during Covid-19. If so, you’re not alone. Whether you want to contact your student loan servicer or your lender, it’s important that you are in regular contact.

Mentor contacted several leading student loan companies to check how these lenders are helping borrowers during the Covid-19 pandemic. If you have a private student loan with these companies, want to refinance student loans, learn how you contact your lender to help manage your student loans during this challenging period.
[refinance_student_loans_table]

1. Earnest

Earnest offers forbearance options for borrowers who need financial assistance. You can contact Earnest by both email and phone. Earnest’s phone number is (888) 601-2801.If you need forbearance for your private student loans, or are facing economic hardship, here is how forbearance works with Earnest:
- Forbearance is available for up to 12 months
- During this time, you can postpone your monthly student loan payments
- Earnest also offers the ability to skip a payment
- Earnest offers a temporary interest rate reduction
- If you are returning to school for a degree, for example, you may be able to pause your student loan payments.
2. Splash Financial

Splash is helping student loan borrowers on a case-by-case basis to pay student loans. You can contact Splash at contact@splashfinancial.com or call 1-800-349-3938. Splash works with various banks and credit unions to provide student loan refinancing. While Splash may not offer any specific student loan forbearance related to the Covid crisis, it’s possible that the lender with whom Splash works offer similar student loan relief.

3. SoFi

SoFi is offering assistance to student loan borrowers who affected by the Covid-19 pandemic. You can contact MOHELA, which is SoFi’s student loan servicer, to inquire about options such as forbearance. You can email SoFi at customerservice@sofi.com or contact MOHELA at 1-877-292-7470.

SoFi offers the following financial assistance if you have student loans with SoFi:
- Forbearance if you lose your job
- Forbearance if you experience economic hardship
- Deferment if you return to school
- Deferment if you experience economic hardship
- Deferment is you are on active military duty
4. Laurel Road

Laurel Road is helping student loan borrowers who are impacted by Coronavirus. If you face financial hardship, you can contact Laurel Road’s student loan servicer, which is MOHELA. The phone number for MOHELA is 1-877-292-7470. Laurel Road may offer the following forbearance to student loan borrowers with Laurel Road student loans:
- Up to 12 months for student loan forbearance, for three months at a time
- Forbearance if you lose your job
5. LendKey

LendKey works with community banks and credit unions to provide student loans and student loan refinancing.LendKey is working with student loan borrowers to help during the Covid pandemic. If you are facing financial hardship, you can call LendKey at 888-996-9268 or by email at care@lendkey.com.

6. Education Loan Finance

Education Loan Finance, which is also known as Elfi, is offering financial help to student loan borrowers during Coronavirus. You can call Education Loan Finance at 1-844-691-3534 or by email at answers@elfi.com to discuss your specific situation. Elfi says it will work with borrowers on a case-by-case basis.

Education Loan Finance offers:
- Forbearance up to 12 months to borrowers who face economic hardship.
7. College Ave

College Ave is working with student loan borrowers in the wake of the Covid-19 pandemic. If you are facing financial hardship during Coronavirus, you can contact College Ave at 1-844-803-0736.

College Ave provides:
- Forbearance for up to 12 months
- College Ave provides forbearance in three- to six-month periods, with an option for an extension
- Student loan deferment for students who return to school
- Student loan deferment if you are on active duty in the military
It’s important that you know how to contact student loan companies during Covid-19 so you can evaluate your options for student loan refinancing, student loan repayment and student loan forgiveness.

[related_posts post_1=’2937′ post_2=’321′ post_3=’257′]
October 17, 2020