Are you eligible for $5 billion in student loan forgiveness?
Student borrowers got $5 billion forgiven on their student loans. Here’s how to qualify.
Here’s what you need to know.
The U.S. Department of Education announced Thursday that 70,000 student borrowers have been granted $5 billion in student loan forgiveness. In October, the Biden administration announced major changes to the cancellation of public service loans. At the time, the Department of Education announced that $2 billion in student loans would be forgiven within weeks. While 22,000 of student borrowers were due to receive student loan relief, new data shows that triple this amount got student loan forgiveness. Here’s how to qualify:
Civil Service Loan Cancellation: Overview
Congress created the Public Service Loan Forgiveness in 2007 and President George W. Bush signed the legislation. The objective of the program was to help civil servants obtain the cancellation of a student loan in exchange for a job in the civil service. However, despite its well-intentioned goals, nearly 99% of student borrowers who applied for student loan forgiveness were turned down. President Joe Biden and US Secretary of Education Miguel Cardona have worked to simplify the program and make the rules easier for student borrowers to get student loan forgiveness. Biden mentioned forgiving civil service loans as one of 3 things to do during student loan relief.
Student Loan Forgiveness: How to Qualify
To qualify for the Civil Service Loan Forgiveness Program, you must meet at least the following conditions:
- You must work full-time (at least 30 hours per week) for a qualified public service or non-profit employer;
- You must be enrolled in an income-based reimbursement plan such as IBR, PAYE, REPAYE or ICR;
- You must make at least the majority of your student loan repayments while enrolled in an income-driven repayment plan; and
- You must make 120 monthly payments on your student loans.
If you meet these and other conditions, the remaining balance of your student loan may be forgiven.
How to Get a Limited Student Loan Forgiveness Waiver
After student borrowers were rejected for student loan forgiveness based on various technicalities, the Biden administration decided to relax the rules to get public service loan forgiveness for a limited period. (Student borrowers will get $15 billion in student loan forgiveness).
For example, by October 31, 2022, you can complete a limited waiver to qualify prior student loan payments that were originally not counted toward the 120-month student loan payment requirement. (Here’s how to get approved for student loan forgiveness even if you’ve already been rejected). This may include:
- student loan repayments for FFELP loans and Perkins loans;
- student loan repayments made before student loan consolidation;
- student loan repayments made under the wrong student loan repayment plan;
- student loan repayments late or with the wrong payment amount; and
- repayment of student loans for active military service
If you are applying for Public Service Loan Forgiveness and your previous payments were declined for any of these reasons, be sure to complete a limited waiver to have those student loan payments counted toward the 120 payments. monthly student loans. (Here’s how to get student loan forgiveness).
Student Loan Forgiveness: Questions and Answers
Here are some helpful questions on how to qualify for student loan forgiveness:
Which student loans are eligible?
Civil Service Loan Forgiveness is only available for federal student loans. Therefore, private student loans are not eligible for student loan relief. (Here’s Who Won’t Get Student Loan Forgiveness).
Need to consolidate your student loans?
The public service loan exemption concerns direct loans. If you have FFELP loans or Perkins loans, you can consolidate these student loans into a direct consolidation loan. That said, if you have previously made FFELP or Perkins Loans student loan payments, you can submit a limited waiver to have those prior student loan payments considered.
Can my employer benefit from a public service debt forgiveness?
Remember that “public service” or “non-profit” refers to your employer, not the work you do. To make sure your employer is eligible, submit a Employer Attestation Form to the US Department of Education each year and each time you change employers.
Which income-based repayment plan should you choose?
Choose the income-driven repayment plan that best suits your unique financial and personal situation. For example, focus on the income-based repayment plan – IBR, PAYE, RPAYE or ICR – which minimizes your student loan payment and maximizes student loan forgiveness.
Can you still get student loan forgiveness?
The Civil Service Loan Cancellation Program is an active program. If you are not currently seeking civil service loan forgiveness, you can still register and start working for student loan forgiveness.
Student loan relief, which student borrowers have enjoyed for nearly two years, will soon end. Get ready for the restart of student loan repayments. You have several options for repaying your student loan. Here are some popular ways to pay off student loans faster: