If you are in default on your student loans and have not enrolled in college, there are options available to you to apply for student loan forgiveness. If you are in good standing with your school, the forgiven amount is cut from your debt. The loan servicer will calculate how much you should pay and how many years you should serve. You will probably still have to make monthly payments until the time you graduate, but they will no longer add interest. This option will work best for students who have not been in a financial struggle since entering college.
To apply for student loan forgiveness program eligibility, you need to be in good standing. Then, you must make 120 eligible payments toward your loan repayment. You must stay in this status or another eligible position throughout the repayment period. Be sure to repay all loan obligation on time every single month after graduating. After 10 years, you become eligible for public service loan forgiveness if you have not been in such a position.
Private lenders will not consider you for a federal student loan forgiveness program if you are not in a position to demonstrate eligibility. You can be eligible if you are in a position to demonstrate full-time attendance at an approved college or university. In addition, the loans you received must be in repayment for at least 30 hours. If you have only received subsidized loans, you cannot apply for federal assistance. You can use the federal direct loan programs, also known as the EDUCs, for this purpose.
There is a separate program for those who are in a low-income family. If you have one eligible child, you may receive up to 100 percent forgiveness of your student loans. The second child in the family may receive a lower amount, but the credit amount offered will be less than it would be for two children in the family with high incomes.
Although you may receive up to 100 percent forgiveness on your federal student loans, you must meet a set of requirements. To apply for these loans, you must be a United States citizen or a resident alien who has attained the legal age to receive this type of loan and you must meet the other eligibility requirements for eligibility. Eligibility requirements vary by agency. If you wish to learn more about this program here, you can visit the website of the Federal Student Aid Corporation.
Another option for those who want to apply for federal assistance is to select the income-based repayment plan. When you select this option, you will need to provide proof of taxable income. The proof of taxable income is defined as the amount on your tax return that is greater than zero dollars.
If you do not meet the income-based repayment option, you can choose to have both federal and private student loans forgiven. One option is to choose the federal forgiveness option, and then pursue the interest rate on the forgiven federal loans while you are enrolled in a service that forgives private student loans. For example, the Peace Corp and certain voluntary organizations will forgive a portion of a student’s loan debt. If you work with one of these organizations, they may also offer a service that forgives both federal and private student loans. If you wish to learn more about this alternative repayment plan for federal assistance, you can visit the website of the U.S. Department of Education.
Whether you have federal student loan forgiveness program eligibility or not, there are many ways to find out what services might be available to you. You can visit the website of the Consumer Financial Protection Bureau or call the toll-free number on the left side of this page. In addition to contacting the CFPB, unemployed workers and military veterans can visit the official government website on approved services, which includes information on approved lenders and repayment plans.