Student Debt Forgiveness Programs
Student loan debt has long been a great weight to carry, and students are suffering from unemployment, loss of wages, anxiety and mounting stress as a result. So any type of student loan debt forgiveness, which can relieve the financial burden on students is especially helpful for student loan borrowers. There are a few ways for college debt forgiveness.
The federal government, through the Higher Education Act, has long pushed for more assistance to students in maintaining and refinancing their student loans, but some say the burden has become too great. “The consolidation of federal student loans has increased borrower liability, particularly because many borrowers no longer qualify for subsidized rates of interest,” says Bivens, vice president of student loans at the nonprofit Consumer Credit Counseling Services, or your credit counselor. This increase in federal funding has helped to relieve the pressures that many borrowers are facing.
Another option to consider in student debt forgiveness is the possibility of deferment or forbearance. Federal student loans are guaranteed loans, and if a borrower does not attend college or if they are not disciplined in paying their federal student loans, the federal government will still provide the student with a Stafford loan, or other type of federal loan, to pay off their student loans. But the interest will accrue. If a student wishes to avoid this penalty, the borrower must declare his or her intent to declare bankruptcy within two years of the date of the loan start date.
Students with at least a 3.5 GPA who volunteer to teach in public schools may also qualify for student debt forgiveness. According to the U.S. Department of Education, “forgivable” student loans include those loans provided by the William D. Ford Federal Direct Loan (or FFEL) program, Direct Loans from the U.S. Department of Education (or Direct Loans authorized by Direct Loan authorities) or certain Perkins or Direct Loan programs. Forgivable loans are subject to the Fair Credit Reporting Act (FCRA), and therefore the loss or theft of a forgivable loan by a consumer reporting bureau will result in a negative credit statement on that person. A student who is enrolled in a school or college program may also qualify for tuition-free status, if the program meets certain criteria, such as being an accredited college or university or having financial assistance primarily for students.
It is possible to apply for student debt forgiveness. A student must first fill out an application stating his or her financial situation, including the expected family contribution, expected monthly income, use of funds, etc. The application should be filed with the appropriate agency in the state where the student resides. Depending on the program applied to, he or she may be able to have late fees waived, points removed or any balance reduced. Most student loan debt forgiveness programs offer a variety of options to their borrowers. It is important to understand how each program works and what its benefits are.
There are various types of student debt forgiveness programs. Some allow borrowers to reinstate their loans after forgiveness; others require that borrowers repay all or a portion of their forgiven loans. In order to determine which program will best meet their financial needs, potential borrowers should compare potential programs and consider the long term impact on their financial situation.
One program that many borrowers qualify for is says bivens. Student loans purchased through say bivens programs are not considered loans for purposes of federal student loans or Perkins loans. Instead, says bivens allows the borrower to be eligible for tuition-free status. In order to take advantage of this perk, borrowers must enroll in a government-sponsored educational program or college that is accredited by the United States Department of Education. The benefits of this type of student debt forgiveness program are that borrowers are not penalized for previous college debts, they do not contribute to the U.S. federal student assistance budget, and they do not lose any eligibility to federal student loans or federal work study after graduation.
In order to find out more about how say bivens programs work, potential borrowers can visit their local federal loan relief office. Many of these offices run a comprehensive student debt relief program. They are equipped to answer most student debt questions. They can also refer potential borrowers to a trusted, reputable student debt consolidation company. Before signing up with a consolidation service, however, borrowers should check the company’s credentials and ensure that the company is a member of the Association of Settlement Companies (TASC).