Do You Qualify For Nonprofit Student Loan Forgiveness?
Non profit student loan forgiveness programs exist in order to assist individuals with educational expenses. These programs are designed to encourage repayment, while helping to reduce the amount of interest paid overall. Nonprofit organizations can grant forgiveness on behalf of an individual based on a number of criteria including the borrower’s status as a full-time or part-time student, their ability to pay back the loan, their level of earnings and other factors.
While it is true that many non-profit student loan forgiveness programs directly benefit students, these groups also work towards providing relief to other individuals. One such group that focuses on aiding former military personnel is the Military Loan Workouts. They provide professional services to veterans in order to help them obtain the best loan repayment information available. Among the services they offer include application assistance and financial education. They also have a number of tools and resources that are free to use to find out which loan repayment options may be right for a veteran.
Nonprofit organizations and corporations tend to extend generous amounts of money to people of all backgrounds in order to promote the interests of their organization. However, not all organizations give to people who are willing to repay. When non profit student loan forgiveness programs encourage repayment, this means that the organization is making a profit. And while it may be wise to spend some of the money that you are awarded to help those in need, if you do not fully repay your loan the organization will still be making a profit.
This profit may be difficult for some people to comprehend. After all, the federal tax code does not state any monetary penalties for not repaying a loan. It only states that any tax due shall be repaid. While it is true that the amount of money owed could be significantly reduced, if the tax code is ignored, the penalty will still be enforced. The result of not paying your student loans with the non-profit student loan forgiveness program will be added interest and penalties, furthering the delay of repaying your debt.
So, what is the difference between public service loan forgiveness and nonprofit student forgiveness? They are both offered by the government at different times of year. At the time of application for student loan debt relief, whether you are eligible for federal student forgiveness or non-profit assistance, the United States government will offer to forgive up to two-hundred percent of your debt if you agree to repay it. In most cases, the forgivable portion is the total of principal and interest paid during the student’s years of repayment. But even if you just qualify for a state-funded student forgiveness program, you may still have some left over. And in some cases, the forgiven amount will be quite a bit more than the outstanding student loan debt owed.
Most loan forgiveness options have similar qualifications. You must be an American citizen, a legally-resident alien who has been a resident of the United States for five full years without a default, and have reached the age of eighteen (often called the Moratorium Period). Another important requirement is that your financial obligation must have been fully discharged during the period of your deferment or forbearance. With respect to federal student forgiveness programs, this requirement does not apply. With respect to private loan forgiveness options, most eligible individuals receive their payments eliminated if they meet the following requirements: have not filed bankruptcy during the period of deferred repayment, do not have a lump sum payment deferred, and do not currently owe more on the account than half of the current aggregate balance.
For most federal and private loan forgiveness programs, once you have reached the required amounts of forgiven debt, your program will end. However, there are some borrowers who qualify for a grace period after which they are eligible for continued loan forgiveness. This can often make public service loan forgiveness the only realistic option for struggling borrowers.
As noted, most borrowers who seek repayment relief from either federal or private sources will qualify for some type of student loan forgiveness. However, there are some borrowers who are ineligible because they do not meet the requirements to file as an individual or because they did not volunteer for the assistance. If you know you may be ineligible for forgiveness, do not waste time applying. Get everything in order before you submit your application. It is better to know ahead of time, rather than finding out too late that you are ineligible for forgiveness.