Get Help With Your Federal Student Loan Debt!
In 2016, the Federal Government offers a variety of Student Loan Debt Relief programs, including a whole host of programs that can help you reduce your monthly student loan payments, temporarily pause payments, or even entirely wipe out your college loan debt.
Many people don’t realize that these programs exist, but if you’ve got a Federally-funded student loan, then it’s likely that you qualify for some of the benefits outlined on this page.
Even if you aren’t having trouble making your monthly student loan payments, you may still be able to take advantage of some of these opportunities to get help with your student loan debt, so make sure to read each of these programs in detail to determine which ones you can actually use.
Federal Student Loan Debt Relief Programs
Americans have made it clear that they are in favor of offering Student Loan Debt Relief to virtually everyone with college loans, and this year, the Politicians have responded in a big way.
There are now a variety of bills in the works sure to offer even better debt relief benefits than those currently on offer, including revisions to President Obama’s Student Loan Forgiveness Program, the Public Service Loan Forgiveness Program, Teacher Loan Forgiveness Programs, Nursing Loan Forgiveness Programs, and a variety of other exceptional Government debt relief programs.
With the Higher Education Act coming up for Re-Authorization later this year, the topic of student loan debt relief is likely to gain even more attention, so be sure to check back often for the latest updates and announcements.
I will make sure to update this page whenever anything substantial is announced.
For now, here’s a list of all the Federal Student Loan Programs currently on offer:
Federal Student Loan Forgiveness Programs
The best way to get rid of your Government-funded school loans is to get them wiped out with one of the Federal Student Loan Forgiveness Programs.
These programs are by far the easiest way to get out of debt, because they literally wipe out whatever you owe without requiring you to do anything other than pay taxes on the amount of debt that was forgiven.
In 2016, the Federal Government offers a wide variety of different forgiveness programs, including programs for all sorts of different reasons, mostly based on your career path.
Read on to discover what opportunities are available, and to find out which ones you can take advantage of.
Don’t neglect anything on this page, because if you do qualify for one of these exceptional forgiveness programs, then you could stand to save tens of thousands of dollars!
1. President Obama’s Student Loan Forgiveness Program
One of the best updates in history Federally-funded student loan relief programs came in the form of President Obama’s Student Loan Forgiveness Program.
Introduced just a few years ago, this program has already undergone some major changes, but the biggest update of recent years was that President Obama finally opened up federal forgiveness benefits to all borrowers, instead of only those who had taken out their loans since 2007.
3 Pieces of President Obama’s Forgiveness Program
- Those who qualify receive complete Federal Student Loan Forgiveness after making 240 monthly payments (20 years’ worth of payments), no matter how much debt is left
- The introduction of the Pay As You Earn Student Loan Repayment Plan (explained in detail below), which is by far the best Repayment Plan currently available
- Updates to the Public Service Loan Forgiveness Program (explained in detail below), dropping the requirement for receiving Federal Loan Forgiveness from 15 years to just 10
The only real downside to President Obama’s changes to Federal student loan debt assistance is that parts of the three tenets described above are only available to people who took out their student loans on or after October 1st, 2007.
To read about this program in detail, please visit my page about President Obama’s Student Loan Forgiveness Program, which you can find here.
2. The Public Service Loan Forgiveness Program
The Public Service Forgiveness Program is one of the best ways to get help with Federal student loan debt, because it lets you wipe out your remaining debt after making payments for just 10 years!
Basically, as long as you qualify for the benefits, all you have to do is make 120 monthly payments (10 years’ worth of payments) on your Federal student loans, then you’ll be able to write the remaining balance off.
Which is awesome, except that there’s a couple major catches to the PSLF Program:
- Only payments made on or after October 1st, 2007 will count toward your required 120 payments, meaning that the soonest anyone can actually qualify for forgiveness is October 1st, 2017
- Only people who work in qualifying public service jobs will be able to take advantage of the program (that makes sense, but it still means that these benefits are limited to a tiny subset of the population of people who need help with Federal student loans)
The good news is that the Government’s definition of a “Public Service” job is not very restrictive, and includes all sorts of positions that you may not necessarily think of as being public service work.
To get the details on how Federal Public Service Loan Forgiveness works, please visit my page about the program here.
3. Nursing Student Loan Forgiveness
If you happen to be a Nurse (or are considering becoming one), then I’ve got great news for you!
Nurses enjoy what I would say are the best student loan forgiveness benefits out of anyone, with three exceptional opportunities to get rid of their school loans.
As of 2016, here are the available Nursing Student Loan Forgiveness Programs currently on offer from the Federal Government:
- The NURSE Corps Loan Repayment Program (NHSC) – For serving just 2 years at a qualifying healthcare facility, the Federal Government will pay off 60% of your qualifying nursing loans, and for an additional 1 year of service, they’ll pay off another 25% of your original balance
- The Perkins Loan Cancellation Program for Nurses & Licensed Medical Technicians – Nurses and LMTs can completely wipe out all debt related to Perkins Loans after serving as Nurses or LMTs for just five years!
- The Public Service Loan Forgiveness Program – By definition, anyone working as a Nurse will qualify for the PSLF Program (explained in detail above), which allows you to write off your student loan debt after making 10 years of monthly payments.
In addition to these excellent Federally-funded programs, there are also a variety of State-funded Nursing loan forgiveness programs on offer.
Currently, I’m aware of Nursing forgiveness benefits being provided by the following states:
- New York
For details on each of the student loan forgiveness programs outlined above, please visit my page about Nursing Student Loan Forgiveness, which you’ll find here.
4. Teacher Student Loan Forgiveness
Like Nurses, Teachers have access to all sorts of excellent Federal student loan relief benefits.
As of 2016, there are four specific Federally-funded programs offering student loan forgiveness benefits to teachers, including:
- The Federal TEACH Grants Program – These offer up to $4,000 a year in Federal financial assistance to college students who are enrolled in a program that will lead to a teaching credential, planning to teach full-time for at least 4 years, and planning to spend those 4 years teaching in a “high-need” field at an educational facility which primarily serves low-income families
- The Perkins Loan Forgiveness Program – Also referred to as “Teacher Loan Cancellation”, Perkins Loan Forgiveness lets you write off a percentage of your Perkins Loan debt each year of service at a school that primarily provides education to low-income families (or as a special education teacher, or a teacher in a designated “shortage area”, like math, science, foreign languages, etc)
- The Stafford Loan Forgiveness Program – This program offers up to $17,500 in loan forgiveness benefits to teacher who satisfy the eligibility conditions, including being employed full-time for 5 complete and consecutive years at an elementary or secondary school which qualifies for Title 1 funds, or which is listed in the Annual Directory of Designated Low-Income Schools
- The Public Service Loan Forgiveness Program – As I’ve explained above a few times, the PSLF Program lets you write off all of your Federal student loan debt once you’ve made 120 monthly payments (10 years’ worth of payments)
But that’s not all! In addition to these Federally-funded student loan forgiveness programs for teachers, some States also offer forgiveness benefits of their own, including:
- The Iowa Teacher Shortage Loan Forgiveness Program – This program offers up to $7,534 in loan forgiveness benefits for Federal Stafford Loans after completing just a single year of teaching!
For additional information about the forgiveness benefits available to teachers, please visit my page on Teacher Loan Forgiveness Programs, which you’ll find here.
5. Government Employee Student Loan Forgiveness
If you work for the Government at any level (including Federal, State, or even Local employees), then you too qualify for Federal financial assistance via the Public Service Loan Forgiveness Program.
The great news is that this program is extremely easy to qualify for, because all you have to do is keep working at your current position (or another one that involves official Government employment), and you’ll be able to wipe out whatever student loan debt you have left after you’ve made 120 monthly payments (10 years’ worth of payments).
For specific details on how it works, please visit my page about Student Loan Forgiveness for Government Employees.
6. Non-Profit Student Loan Forgiveness
As of 2016, everyone who works for a Non-Profit in some capacity is also eligible to qualify for Federal financial assistance with their student loan debt, again via the PSLF program.
To qualify for Non-Profit forgiveness benefits, all you have to do is be employed full-time at a 501(c)(3) organization, or in any other role that would be considered a “Non-Profit Employee”.
Other types of jobs that would count for this program include:
- Jobs with any Federal, State, or Local Government Agency
- Jobs in the Military, Emergency Management, Public Safety or Law Enforcement
- Jobs with Public Health Services, Public Education, Public Library Services or School-Based Services
- Jobs with Public Interest Services, Early Childhood Education, Public Service for People with Disabilities or Public Service for the Elderly
As you can see, there are all sorts of ways to qualify for the Non-Profit Student Loan Forgiveness Program, which makes this one of the most popular form of forgiveness currently on offer.
To get details about how the program works, how you can apply to it and more, please visit this page.
7. Peace Corps & AmeriCorps Student Loan Forgiveness
Via the Public Service Loan Forgiveness Program, anyone who serves in the Peace Corps or AmeriCorps is also fully eligible to receive financial assistance with their student loans from the Federal Government.
8. Military Loan Forgiveness Programs
They may be the most difficult form of Federal student loan debt relief to qualify for, but the Military Loan Forgiveness Programs do offer fantastic benefits for those needing help with excessive student loan debt.
Officially referred to as the College Loan Repayment Program, there’s a specific program set up for each service branch of the military:
- The Army College Loan Repayment Program – Generally regarded as the best of the military repayment programs, Army SLRP offers up to $65,000 in forgiveness benefits, doled out on an annual basis that begins getting delivered after you qualify your first year of service
- The Army Reserves College Loan Repayment Program – Army Reservists start qualifying for benefits after their first year of service too, but where regular Army personnel get 33.3% forgiven for one year of service, Reservists only receive half that amount each year
- The Navy College Loan Repayment Program – Sailors get about the same benefits as Soldiers, being eligible for up to $65,000 in lifetime student loan forgiveness benefits, and qualifying for benefits after completing their first year of service
- The Navy Reserves College Loan Repayment Program – Reserve Sailors are eligible for College Loan Repayment benefits, but they are only allowed to receive $10,000 in total loan forgiveness, and they have to agree to a service contract of at least 6 years
- The Air Force College Loan Repayment Program – Airmen get CLRP benefits too, but they get short-changed compared to Soldiers and Sailors, with just $10,000 in lifetime total loan forgiveness available for similar service requirements
- The National Guard College Loan Repayment Program – Both Officers and Enlisted Guardsmen are eligible for the National Guard’s version of CLRP, and they’re able to receive up to $50,000 in total forgiveness benefits, but this program has complicated eligibility requirements
- The Marines College Loan Repayment Program – It seems to be a running joke that the Marines are constantly left out of programs that all other branches of the military get access to, and when it comes to loan forgiveness benefits, it’s the same tired story
- The Coast Guard College Loan Repayment Program – Coast Guard personnel are fortunate enough to qualify for up to $30,000 in total loan forgiveness benefits upon enlisting in the service, doled out in increments of $10,000 for each year of completed service
The important thing to keep in mind about military loan forgiveness benefits is that some of these are offered on a first-come, first-served basis, and that the demand for funding far exceeds the amount of funds actually available.
What that means is that if you want to actually receive any money from one of these programs, you’ll need to get your application filled out and turned in as early as possible.
Another thing to keep in mind is that these programs are quite complicated, and that you don’t automatically qualify for both CLRP benefits and Post 9/11 GI Bill benefits at the same time.
To make sure that you’re able to take advantage of these benefits, please visit my page about the College Loan Repayment Program here.
Then, to make sure that you’re maximizing your other military benefits, please check out my Guide to Military Education Benefits.
Federal Student Loan Consolidation Programs
One of the fastest ways to get financial assistance for student loan debt from the Federal Government is to Consolidate Federal Student Loans.
Federal Student Loan Consolidation can save you a great deal of money, but only under certain circumstances – in others, it can lead to economic disaster.
The bad part about Direct Consolidation Loans is that they’re extremely complicated, and that determining whether or not one will help you will require all sorts of complicated calculations, but the good part about them is that they are entirely free!
To figure out if consolidation would work for you, please visit my page about Direct Consolidation Loans here.
Federal Student Loan Deferment Programs
Another extremely powerful form of federal debt relief for student loans is called a loan deferment.
The good news is that Federal Student Loan Deferment Programs exist for a wide variety of reasons, making virtually anyone who’s having trouble paying their monthly payments eligible to apply for and receive a deferment.
The bad news is that deferments aren’t as valuable as forgiveness, in that they don’t actually cancel any of your loan debt, but simply put your repayments on pause, giving you some breathing room to acquire more capital, generate some savings, and hopefully be able to afford those payments once they’re restarted.
There is a huge variety of deferment programs available now, with over 15 unique ways to qualify for a deferment at the time of this writing.
Available deferment programs include:
- Economic Hardship Deferments
- Unemployment Deferments
- In-School Deferments
- Military Service Deferments
- Post-Active Duty Deferments
- Teacher Loan Deferments
- Graduate Fellowship Deferments
- Post-Enrollment Deferments
- Domestic Volunteer Deferments
- Internship & Residency Deferments
- National Oceanic and Atmospheric Administration (NOAA) Deferments
- Parental Leave Deferments
- Public Health Services Deferments
- Rehabilitation Training Deferments
- Tax-Exempt Volunteer Deferments
- Temporary Total Disability Deferments
- Working Mother Deferments
For details on each of these programs, please visit our page about federal student loan deferments, here, or click one of the links in the programs list above.
Federal Student Loan Forbearance Programs
Forbearances are extremely useful, as they’re typically made available those borrowers who can’t make their monthly student loan payments, but who don’t qualify for any of the deferment programs listed above.
What’s the difference between deferment and forbearance? Glad you asked!
While a deferment allows you to pause making loan payments, and in some cases also pause your interest accrual, a Student Loan Forbearance will pause your loan too, but it will never stop interest from accruing.
Forbearances come in two flavors, with Discretionary Forbearances and Mandatory Forbearances, each presenting it’s own eligibility criteria and specific mechanisms of action.
A discretionary forbearance is granted only if your lender (whoever you make your student loan monthly payments to) agrees to offer it to you.
You can request a discretionary forbearance for either reasons of financial hardship, or serious illness, but it’s up to the lender to determine whether or not you actually qualify for the program.
Unfortunately, you know how that works – most lenders deny forbearance requests because they cost them money, add risk to their loans, etc.
Fortunately, there are ways to get around their denials, using Mandatory Forbearances, as detailed below.
A mandatory forbearance is one that must be offered by your lender, as long as you meet particular eligibility requirements, including:
- Serving in a medical or dental internship or residency program, and meeting some specific requirements
- Owing 20% or more of your total monthly gross income to student loan debt repayments
- Serving in a national service position, for which you’ve received a national service award
- Performing a teaching service that would allow you to qualify for one of the teacher loan forgiveness programs
- Qualifying for partial repayment of your loans under the U.S. Department of Defense’s Student Loan Repayment Program
- Serving as a member of the National Guard and having been activated by a governor, but not being eligibel for traditional military deferments
For further details on how forbearances work, including how to apply for them, be sure to visit our page on Federal Student Loan Forbearances, here.
Federal Student Loan Repayment Programs
As of 2016, you have quite a few options for determining just how quickly, and in what way, you want to pay back your Federal student loans.
In fact, there are currently 7 different Federal Student Loan Repayment Options to choose from, each of which presents some unique pros and cons.
Here’s a quick introduction to each of the 7 plans:
The Standard Repayment Plan
The Standard Repayment Plan is the default plan for paying back Federally-funded student loan debt, and virtually all new Federal student loans are initially disbursed with this payment plan in place.
The standard plan requires paying off your loan in 10 years time, and includes fixed monthly payment that will not fluctuate based on your current income level.
This is the best plan for those borrowers who don’t plan on having trouble meeting monthly payments since it pays the loan off quickly, minimizing interest accrual.
The Graduated Repayment Plan
The Graduated Repayment Plan is perfect for recent college graduates who aren’t making much money now, but who expect to start making significantly more in the near and distant future.
Under this plan, you’ll have 10 years to pay back your debt, and your monthly payments will start off quite low, but end up increasing every two years.
This is a great plan for those borrowers who expect to start off earning a small income, but be able to rapidly climb the corporate ladder and begin making significantly more money every couple years.
The Extended Repayment Plan
The Extended Repayment Plan is excellent for people with a lot of student loan debt, or a high debt to income ratio, because it allows you to schedule your student loan payments all the way out to 25 years.
This plan reduces monthly payments, which is good in the short-run, but it also leads to generating significantly more interest costs over the course of your loan, making it way more expensive than a 10 year repayment plan.
We recommend this plan for borrowers who are virtually sure that they won’t be able to keep up with 10 year payment plans, due to relatively low income or relatively high student loan debt.
The Income-Based Repayment Plan
The Income-Based Repayment Plan has been around for years, and is a favorite for individuals who aren’t expecting regularly, steady paychecks, either because they work seasonal or temporary gigs, work as independent contractors, or receive salaries based off performance.
Income-based repayment allows you up to 25 years to pay off your student loans, and provides a flexible repayment schedule where monthly payments are determined based on your income, but the plan is only available to borrowers facing a “Partial Financial Hardship” (student loan debt that exceeds 15% of the difference between your adjusted gross income and 150% of the poverty line for your state and family size).
This plan is great for borrowers with fluctuating income levels, unsteady employment and difficulty meeting their monthly payments on the shorter, but temporarily more expensive 10 year plans.
The Pay As You Earn Repayment Plan
The Pay As You Earn Repayment Plan is new, and was recently introduced via President Obama’s Student Loan reforms enacted in 2012.
Pay As You Earn is similar to income-based repayment, except that it only offers up to 20 years to pay back your debt, and it limits monthly payments at a lower rate, to just 10% of your discretionary income.
Like income-based repayment, we recommend this plan only for those borrowers who can’t make their monthly payments on the 10 year plans, since far more interest accumulates on these longer repayment schedules.
The Income-Contingent Repayment Plan
The Income-Contingent Repayment Plan is similar to both Income-Based Repayment and the Pay As You Earn plan, where monthly payments are set based on income.
This plan recalculates your monthly payments each year, based on your adjusted gross income, family size, and total amount of student loan debt that you owe, allowing you up to 25 years to pay back your loans.
We recommend income-contingent repayment for those borrowers who don’t expect to have stable employment or stable income, but who can’t qualify for the other fluctuating plans, or afford the higher monthly payments required by 10 year plans.
The Income-Sensitive Repayment Plan
The Income-Sensitive Repayment Plan is almost identical to the income-contingent plan, but it only allows up to 10 years for paying off your debt.
This plan is better than the income-contingent repayment plan in that it prevents you from accumulating more interest over the course of your loan (increasing it’s total cost), but it will only work for those borrowers who can afford the relatively higher monthly payments associated with a shorter, 10 year plan.
Another downside to this plan is that your monthly payments aren’t determined based on a consistent formula established by the Federal Government, but by whatever formula your lender has decided to use, meaning that you may end up with a great, or a crappy deal.
For more details about each of these repayment options, and to figure out which one is best for you, check out our page on Federal Student Loan Repayment Programs, here.
Federal Student Loan Refinance Programs
Unfortunately, it’s still not yet possible to refinance your Federal student loan debt.
However, the good news is that Elizabeth Warren recently proposed making this possible.
To read about her attempt to make refinancing available to everyone with Federal student loans, view my page about the August, 2014 Elizabeth Warren Student Loans Bill.
If you have questions about how these programs work, which programs you’re eligible for, how to apply for the programs, or even whether or not it’s a good idea, then please ask away in the comments section below.
I’ll do my best to get you a reply within 24 hours.
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