The US student loan relief programs available to borrowers can cut or erase federal student debt. The government reduces and eliminates student loan debt for borrowers who meet the requirements.
Borrowers who work for a non-profit organization or the government may apply for the Public Service Loan Forgiveness (PSLF) program. The PSLF program eliminates the borrower’s remaining balance after a set number of qualifying monthly payments while working full-time for:
- The US federal government, including military service.
- A state or local government.
- A tribal government.
- A non-profit organization.
Full-time status depends on the employer, but it is at least 30 hours per week. Borrowers may also apply for the program if they work part-time for multiple qualifying employers that equal full-time work.
The borrower must make 120 monthly payments under a repayment plan. The payment must be at least for the amount due on the bill and not be more than 15 days late. Payments made while in school, during a grace period, a deferment, or a forbearance do not count.
The qualifying payments do not need to be consecutive. For instance, the borrower could make 60 payments, ask for a deferment after an emergency, and then make another 60 qualifying payments. The borrow cannot apply for the PSLF program sooner by making higher payments.
The Teachers Loan Forgiveness program may reduce student loan debt for school instructors if they teach for five consecutive years at a low-income public school. The program can forgive up to $17,500 of government school loans per person.
The program requires borrowers to have at least a bachelor’s degree and a state teaching certification. The state must not have waived the certification on an emergency, provisional, or temporary basis.
Another way for borrowers to reduce a portion or all of the debt includes Perkins Loan cancellation for volunteer service or other qualifying employment. Examples of occupations that can reduce student loans include being a firefighter, law enforcement officer, nurse, and public defender.
For Perkins Loan cancellations, the borrower must have qualifying employment for a certain period, usually five years. The government may reduce the loan by 15, 20, or 30 percent for service fewer than five years.
The government may discharge a Perkins Loan due to bankruptcy, disability, and death. The borrower may also not have to pay back the loan if the school closes before the student can complete the academic program.
The borrower must have a government loan. Private student loans do not qualify for government relief programs. The following tips can help cut student debt if they cannot sign up for the above programs or have a private loan.
By Admin –