Are you among the great number of Americans who always nurture this desire to see their student loan debt disappear one day? Well, this can be a reality; but there are several conditions that need to be met. These programs are not a quick-fix solution. They require several years of regular payments by borrowers before the federal government can provide Student Loan Forgiveness.
A friend of mine, Sean, paid part of his student load off with extra money from a $30,000 kitchen remodel project. The company that did the remodel for him helped him acquire a load for the project, and after the loan was put in escrow the project was started. Through a number of minor changes that saved a little bit of money here and there, when the kitchen remodel was finished, Sean had almost $1,200 left that he used to pay down some of his remaining student load balance. Sean gave me the kitchen remodel company’s web address so I’ll add the link in case anyone is interested.
Most of those with outstanding student loan balances do not have the option to try Sean’s method though. However, there are various student loan forgiveness programs that have been designed and offered by the government to reduce the mounting debt from the borrowers’ shoulders. However, there is a lack of awareness of these programs. With the help of the internet, access to information is not an issue anymore. In fact, one can look online for a debt relief company and discuss the matter. It is always helpful to consult a student loan specialist and get detailed information about these repayment and forgiveness options.
Student Loan Consolidation and Forgiveness snapshot:
Most of the student loan programs are associated with low-paid careers such as public services or teachers and carry a lot of restrictions on them. Let us take a look at some of the programs.
Income Based Repayment (IBR):
As per this program, borrowers can be eligible for reduced monthly payments and after 25 years of regular payments, the balance is forgiven. If your loan amount is considerably higher as compared to your income and family size, you may be eligible for $0 monthly payment. Check online to see if you qualify or talk to your mortgage consultant to see your eligibility for this program.
Pay as you Earn Plan:
Under this, borrowers may get their loans forgiven after making reduced monthly payments on their debt for 20 years. You need to provide evidence of at least partial financial hardship apart from the mentioned eligibility criteria. Get in touch with a leading debt consolidation company to learn more details on this.
Public Service Program:
This program was launched in 2007 for people who are employed in public enterprises. Borrowers who work in federal, state or local government jobs can seek this program. Borrowers who have a high student debt in comparison to their income can qualify for this. They also need to make 120 regular monthly payments against their debt, and they must also be employed at a full-time public service job for a minimum of ten years (these can be non-consecutive years). The loans that qualify for this are:
Federal Direct Loans
Federal Family Education Loan (FFEL)
Some Perkins Loans can be consolidated into a Direct Loan
Borrowers, who are not sure about their loan type, can contact student consolidation consultants.
Teacher Loan Forgiveness:
Borrowers may be eligible for some other loan forgiveness programs from their employment. For example, teachers may be eligible for the teacher loan forgiveness program. However, they need to be in the teaching profession at a qualifying school for five consecutive years to get a part of their federal student debt balance forgiven. Check with a debt consultant for more on this.
It is important for borrowers to keep a tab on their debt and make a regular payment. Student Loan Forgiveness is a long-term benefit, and borrowers need to be responsible for qualifying for these programs.