How to Qualify for the Best Student Loan Debt Relief Programs
In 2019, the Federal Government offers a huge variety of programs created to provide student loan debt relief benefits to those struggling with their college debt.
If you’re having trouble making your monthly payments, then the good news is that it’s highly likely you’ll qualify for at least one (if not more) of the many student loan relief packages now on offer, each of which could stand to save you tens of thousands of dollars over the length of your loan.
Whether you’re looking to get enrolled in a student loan forgiveness program, discharge your loans entirely, use a deferment or forbearance to put your loans on hold for a bit or consolidate your loans to reduce your monthly payments, you’re come to the right place!
This Guide to Federal Student Debt Relief goes through each of the available Federal financial assistance programs in detail, explaining what benefits they offer, who qualifies for them, and how to apply for them in a way that will increase the chances that you’re accepted into the program.
Quick Links for Easy Navigation
To help you navigate through this Guide as quickly as possible, please feel free to use the list of links below to skip to the specific section that’s most relevant to you:
- Student Loan Forgiveness Programs
- Student Loan Discharge Programs
- Student Loan Consolidation Programs
- Student Loan Delinquency Programs
- Student Loan Default Programs
- Student Loan Deferment Programs
- Student Loan Forbearance Programs
- Student Loan Repayment Plans
After reviewing this Guide’s content, if you have any questions about how any of these programs work, if you’re confused about which work best for you, or if you have any other questions about student loan debt, then please feel free to ask them in the Comments section at the very bottom of this page.
One thing to keep in mind while reviewing this Guide is that it’s created for people with Federal Student Loan Debt, and won’t help with Private loans.
If you have Private debt, then please visit my Guide on Private Student Loan Debt Relief instead.
Get Help With Your Loans!If you're truly struggling with student loan debt, then you should consider paying a Student Loan Debt Relief Agency for help. Why? Because the people working at these companies deal with student loans all day, every day, and they're your best chance at figuring out how to get your loans back under control.
For help with Federal Student Loans call the Student Loan Relief Helpline at 1-888-906-3065. They will review your case, evaluate your options for switching repayment plans, consolidating your loans, or pursuing forgiveness benefits, then set you up to get rid of the debt as quickly as possible.
For help with Private Student Loans call McCarthy Law PLC at 1-877-317-0455. McCarthy Law will negotiate with your lender to settle your private loans for much less than you currently owe (typically 40%), then get you a new loan for the lower, settled amount so you can pay off the old loan, repair your credit and reduce your monthly payments.
I've spent 10 years interviewing debt relief agencies, talking to all sorts of "experts", and these are the only two companies that I trust to help my readers. If you have a bad experience with either of them, please make sure to come back and let me know about it in the Comments!
Federal Student Loan Forgiveness Programs
There’s literally never been a better time to be shopping for Federal Student Loan Forgiveness, because the suite of programs currently available is more powerful, more comprehensive and easier to qualify for than ever before.
Almost everybody who’s ever borrowed money for school from the Federal Government will be able to qualify for some sort of forgiveness program, and that’s especially true if you’re willing to consider a career change, because most of these benefits packages are based on your job.
Whether you owe a few thousand dollars, or several hundred thousand dollars, Federal Student Loan Forgiveness Programs can help you wipe that debt out in no time at all, eliminating your loans, in some cases, without requiring you to pay another penny!
Please see the links below for a list of the best Federal forgiveness programs currently on offer, and be sure to click through the links within each section to reach my Comprehensive Guides on each of these fantastic federal relief packages:
- President Obama’s Student Loan Forgiveness Program
- President Trump’s Student Loan Forgiveness Program
- The Public Service Loan Forgiveness Program
- Federal, State & Local Government Employee Loan Forgiveness Programs
- The Non-Profit Employee Student Loan Forgiveness Program
- Military Student Loan Forgiveness Programs
- Nursing Student Loan Forgiveness Programs
- Doctors & Dentists Student Loan Forgiveness Programs
- Teacher Student Loan Forgiveness Programs
- State-Based Student Loan Forgiveness Programs
President Obama’s Student Loan Forgiveness Program
President Obama’s Student Loan Forgiveness Program was created to significantly expand the number of people eligible for Federal Student Loan Forgiveness Benefits, and to offer those benefits at a much faster rate than they’d ever been provided before.
Obama Loan Forgiveness is not the real name of any particular benefit program, but a collection of updates he introduced to student loan laws, including several new Federal Student Loan Repayment Plans, each of which offer the opportunity to qualify for Federal forgiveness benefits.
Known as the “Income-Based” Repayment Plans, the Pay As You Earn Student Loan Repayment Plan (PAYE) and Revised Pay As You Earn Student Loan Repayment Plan (REPAYE) are most borrower’s best options for reducing their monthly payments as much as possible without ruining their access to Federal loan forgiveness benefits.
If you’re looking to utilize the powerful Public Service Loan Forgiveness Program, which I explain in detail below, then you’ll have to enroll in an Income-Based Student Loan Repayment Plan, and PAYE and REPAYE are two excellent options that we only have access to because of President Obama and “Obama Loan Forgiveness” reforms.
For full details on how this works, please visit my Guide to President Obama’s Student Loan Forgiveness Program.
President Trump’s Student Loan Forgiveness Program
While the country may be divided on whether or not President Trump has done a good job leading our nation, one thing is abundantly clear: while a candidate, he offered some excellent student loan reforms that would have taken Obama Loan Forgiveness and made it even better.
At the time of this writing, Trump has failed to live up to his promises on the student loan reform front, and instead of offering Federal forgiveness benefits to literally every single borrower, and reducing the amount of time required to earn those benefits from 20 years to just 15 years, he’s done absolutely nothing to change the sad state of affairs we’re currently facing.
Like him or loathe him, he does have the potential to fix the student loan crisis, and we should all be pulling for him to make the right decision and start living up to the promises he offered on the campaign trail.
For full details on his proposals, how they’d improve Federal loan relief options, and how they may impact you personally if ever instituted into law, please visit my Guide to President Trump’s Student Loan Forgiveness Program.
The Public Service Loan Forgiveness Program
There’s no more powerful Federal loan relief program than the Public Service Loan Forgiveness Program, or PSLF for short, which offers complete student loan forgiveness in return for 10 years of public service.
What’s public service? Fortunately, the definition is pretty loose, and any job working as a Federal Employee, in State or Local Government, or as a Non-Profit 501(c)(3) employee will qualify you for PSLF benefits.
That includes all sorts of jobs that you may not consider as “Public Service”, including many jobs in Public Safety, Law Enforcement, Emergency Management, Public Health Services, Public Education and other School-based Services, Public Interest Law Services, Early Childhood Education and Military Service.
If I were still buried in excessive Federal debt, I’d be looking to change careers and get into a role that qualifies for PSLF; that’s how powerful this program is, and why I recommend it to virtually everyone who asks me about student loans.
One trick to qualifying for PSLF is that you have to be enrolled in an Income-Based Repayment Plan while making your monthly student loan payments, so if you’re trying to utilize PSLF, make sure that you’re issuing payments under one of those Income-Based Plans.
For full details on how PSLF works, please visit my Guide to the Public Service Loan Forgiveness Program.
Federal, State & Local Government Employee Loan Forgiveness Programs
Commonly referred to as the Federal Employee or Government Worker Student Loan Forgiveness Program, this benefit is actually no different from Public Service Loan Forgiveness Program (PSLF).
As I already outlined in the section above, PSLF offers completely Federal loan forgiveness after serving in a qualifying Public Service role and making 10 years worth of full, on-time monthly payments under on of the Income-Based Federal Student Loan Repayment Plans.
The best thing about the Government Employee Loan Forgiveness Program is that it’s available to EVERYONE who works for ANY sort of Government, at any level, including the President himself, everyone in the Military, and all Federal, State or Local Government Employees.
What this means is that even if you don’t currently qualify for PSLF, all you need to do to eliminate your student loans is find a qualifying job, get enrolled in one of the Income-Based Repayment Plans, and hang tight for 10 years while making your payments on-time and in-full, then your remaining debt will be forgiven.
And perhaps the best part about PSLF forgiveness is that it doesn’t matter how much you owe; if you’ve got $20,000 or $2,000,000 in debt, it’ll be wiped out entirely as soon as you make that 120th monthly payment (10 years worth), but even better – you also won’t have to pay taxes on any of the forgiveness you receive!
For full details on this program, please visit my Guide to Student Loan Forgiveness for Federal Employees, State & Local Government Workers.
The Non-Profit Employee Student Loan Forgiveness Program
Non-Profit 501(c)(3) employees have access to the same incredible benefits offered to Government Employees; the Public Service Loan Forgiveness Program (PSLF).
In return for 10 years of full-time work at a qualifying Non-Profit 501(c)(3), you can earn complete Federal loan forgiveness benefits.
These benefits are released at the time you make your 120th “qualifying payment”, and by “qualifying payment”, I mean payments that were made in-full and on-time while you were enrolled in an Income-Based Repayment Plan, and working full-time at a non-profit company or organization.
And these benefits are incredibly powerful, because one of the best things about Non-Profit Loan Forgiveness is that it offers total forgiveness without generating a huge bill from the IRS.
What do I mean by that? Most student loan forgiveness programs on offer allow you to wipe out your debt to the Federal Government, but require you to report the amount of money discharged as “Taxable Income” to the IRS, meaning that they’ll collect income taxes on however much debt you got forgiveness from.
For full details on hos this program works, please visit my Guide to Student Loan Forgiveness for Non-Profit Employees.
Military Student Loan Forgiveness Programs
Military Personnel have access to some of the best, most powerful Federal student loan relief packages on offer, including the Public Service Loan Forgiveneess Program (PSLF), as well as a variety of programs only available to Service Members, like the Military College Loan Repayment Program (CLRP).
Benefits are determined by MOS and Service Branch, but generally the Army and Navy have the best packages on offer, though the Air Force, Coast Guard and even the Marines typically offer something to their Service Personnel as well.
Military Forgiveness Benefits change all the time, depending on the need for new recruits, so be sure you’ve looking at the latest information when determining what’s available to you, and don’t make decisions based on old data!
For full details on how forgiveness works for Service Personnel, be sure to look at my Guide on Student Loan Forgiveness for Military Personnel.
In addition to powerful loan forgiveness benefits, Service Personnel also have access to a ton of different Military Education Benefits, and I’ve developed full Guides on each of the programs on offer, including:
- The Forever GI Bill
- The Post 9/11 GI Bill
- The Yellow Ribbon Program
- GI Bill Benefits Transfers
- Basic Allowance for Housing
- Military Tuition Assistance
- Military Spouse Education Benefits
Nursing Student Loan Forgiveness Programs
Some of the best Federal relief benefits are offered to Nurses, who definitely work hard, play a huge role in providing a valuable service to society, and in my opinion, deserve as much as we can possibly provide them with!
There’s a pretty wide assortment of programs that offer financial relief to Nurses, including excellent forgiveness programs for Nurses working in Health Professional Shortage Areas, as Nurse Educators, and in other specific high-need roles.
I’ve created Guides for each of the Nursing Forgiveness Programs currently on offer, including:
- The NURSE Corps Loan Repayment Program
- Perkins Loan Forgiveness for Nurses & Licensed Medical Technicians
- The NHSC NURSE Corps Scholarship Program
- The NHSC Loan Repayment Program
- State-Funded Nursing Student Forgiveness Programs
- Privately-Funded Nursing Loan Forgiveness Programs
To get an overview on all of the excellent Federal loan relief programs available to Nurses, please check out my comprehensive Guide to Student Loan Forgiveness Programs for Nurses.
Doctors & Dentists Student Loan Forgiveness Programs
Doctors and Dentists have access to some excellent Federal student loan relief benefits via the NHSC Students to Service Loan Repayment Program, often abbreviated as S2S LRP.
S2S LRP was created to incentivze Doctors and Dentists to live and work in locations that don’t have enough Doctors or Dentists, referred to as Health Professional Shortage Area, which tend to be either rural areas, or inner cities.
And while jobs in those locations may not sound all that appealing, especially when you could probably make more in the suburbs, the S2S LRP does offer up to $120,000 in total student loan forgiveness benefits, which is a substantial amount of money, and worthy of your consideration.
For full details on how this program works, check out my Guide to the NHSC Students to Service Loan Repayment Program for Doctors & Dentists.
Teacher Student Loan Forgiveness Programs
We can probably all agree that Teachers are underpaid, and underappreciated, but on the Federal student loan relief front, they’ve at least got something to celebrate: when it comes to access of Federal student loan forgiveness benefits, almost nobody has it better than Teachers!
With several different programs currently on offer, Teachers in a variety of roles and positions, but especially those teaching in STEM, Special Needs, or in areas with Teacher Shortages, can qualify for up to tens of thousands of dollars in Federal financial relief.
Some of the best programs currently available to Teachers include:
- The Stafford Loan Forgiveness Program
- The Perkins Loan Cancellation Program
- The Federal TEACH Grant Program
- The HRSA’s Healthcare Faculty Loan Repayment Program
For full details on all of the benefits offered to Teachers, please visit my Guide to Teacher Student Loan Forgiveness Programs.
Some Teachers will also qualify for the excellent Public Service Loan Forgiveness Program, so if you’re teaching and need help reducing your Federal debt, you’ll certainly want to look into that one as well! Find my Guide on PSLF here.
State-Based Student Loan Forgiveness Programs
Many States offer Federal student loan relief programs of their own, and typically the benefits are provided based on the borrower’s career, with Nurses, Doctors, Lawyers and Public Service Workers tending to receive the lions share of the attention.
You never really know what’s on offer until you check, and while these benefits programs can change at a moments notice (especially in states where they’re having funding and budget problems), it’s certainly worth looking into what’s available in your state, as well as across the country.
I’ve developed an entire section of my site dedicated to State-Based Federal relief benefits, and I highly advise that you take a look to see what you may be able to qualify for.
For full details on how these programs work, please look at my Guide to State-Based Student Loan Forgiveness Benefits.
Federal Student Loan Discharge Programs
Before I explain each Discharge program offered in detail, let me first walk you through the differences between Student Loan Forgiveness and Student Loan Discharges.
Both Forgiveness and Discharge Programs are going to help by wiping out your student debt, sometimes in full, sometimes as a percentage of the total amount you owe, but where the difference lies is typically that Forgiveness Programs will take some time to qualify for, while Discharge Programs are basically immediate.
Because Discharge Programs let you wipe out your loans in an instant, they tend to be harder to qualify for, and they’re also going to universally require that you report whatever amount of money you got discharged to the IRS, which you’ll then have to pay income taxes against.
That may sound scary, but remember, even if earning a student loan discharge leads to having to pay a little bit of money to the IRS, it’s probably a much better option than owing a ton of money to one of the notorious student loan servicing companies.
Here’s a breakdown of the best Federal Student Loan Discharge Programs currently on offer:
- The Borrower’s Defense Against Repayment Program
- The Federal Student Loan Bankruptcy Discharge Program
- The Closed School Student Loan Discharge Program
- The Total & Permanent Disability Discharge Program
My suggestion is to review each of the Federal Discharge programs on offer, see if you think you can qualify for any of them, then determine which one has the highest chance of successfully wiping out your debt before actually applying to any of them.
In fact, once you’ve figured out which ones you think you have access to, feel free to ask in the Comments below and I’ll give you my own thoughts on whether or not it sounds like you’ll be able to qualify for the Discharge!
The Borrower’s Defense Against Repayment Program
The Borrower’s Defense Against Repayment Program, also commonly called the Borrower’s Defense to Repayment Program, or simply BDAR, is my single favorite Federal student loan relief program in existence.
Why? Because it was created to help borrowers who’ve been scammed, defrauded, lied to, or had some other kind of fraud committed against them by corrupt Schools and Student Loan Servicing Companies.
BDAR allows you to request that the Department of Education review the illegal activity committed against you and determine that if the behavior was egregious enough, that your loan should be immediately and fully discharged, letting you walk away from the debt!
The trick to qualifying for a BDAR Discharge is that you have to convince the DOE reviewer that the illegal activity was the sole reason you agreed to borrow money to attend your school, or the sole reason why your loans fell into delinquency and default, and that’s not an easy process.
For full details on the program works, and for information about how to write a compelling BDAR Application, please visit my Guide to the Borrower’s Defense Against Repayment Program.
You might also want to visit my individual Guides on Specific Schools, and Student Loan Servicing Companies, where I review the lawsuits these organizations face, talk about what they’ve been accused of doing wrong, and explain how you can use the details of those lawsuits to increase the chances of getting your BDAR Application approved.
You’ll find my Guides on the Lawsuits & BDAR Discharges for Specific Schools here:
- University of Phoenix Lawsuits & Loan Forgiveness
- The Art Institute Lawsuits & Loan Forgiveness Program
- The DeVry Lawsuits & Loan Forgiveness Program
- The Westwood College Lawsuit & Loan Forgiveness Program
- The Walden University Lawsuit & Loan Forgiveness Program
- The Capella University Lawsuit & Loan Forgiveness Program
- The Full Sail University Student Loan Forgiveness Program
- The ITT Tech Lawsuit & Student Loan Forgiveness Program
- The Corinthian Colleges Lawsuits & Loan Forgiveness Program
- The Everest College Lawsuit & Loan Forgiveness Program
- The Heald College Lawsuit & Loan Forgiveness Program
- The WyoTech Lawsuit & Loan Forgiveness Program
- The Le Cordon Bleu Lawsuit & Loan Forgiveness Program
- The Kaplan University Lawsuit & Loan Forgiveness Program
- The Anthem College Lawsuit & Loan Forgiveness Program
- The Brown Mackie College Lawsuit & Loan Forgiveness Program
- The AmericanIntercontinental University Lawsuit & Loan Forgiveness Program
- The Colorado Technical University Lawsuit & Loan Forgiveness Program
You’ll find my Guides on the Lawsuits & BDAR Discharges for Specific Student Loan Servicing Companies here:
- The Navient Lawsuits & Student Loan Forgiveness Program
- The Career Education Corporation Lawsuits & Loan Forgiveness Program
- The FedLoan Lawsuit & Student Loan Forgiveness Program
- The Great Lakes Lawsuits & Loan Forgiveness Program
- The National Collegiate Lawsuit & Loan Forgiveness Program
If I were buried in Federal student loans, the BDAR Program is one of the first places I’d look for effective, and immediate Federal debt relief.
Personally, my strategy for eliminating the debt would be to make sure that I get employed at a job which qualifies for PSLF, enrolled in a repayment plan that counts for PSLF, then start pursuing a BDAR Discharge against the school if I felt like I had been defrauded in the process of deciding to go there.
One thing to keep in mind about Borrower’s Defense Discharges is that these are a legal process that you do NOT want to lie about!
There could be HUGE repercussions for making things up on your BDAR application, or even for stretching the truth, exaggerating, etc., so please, please please, do NOT ruin BDAR’s availability for those who need it by taking advantage of the system and attempting to lie or twist the truth.
Do NOT make things up about the school or servicing company, otherwise this program will get pulled from existence and nobody will be able to use it anymore.
The Federal Student Loan Bankruptcy Discharge Program
While it’s still extremely difficult to qualify for a Federal Student Loan Bankruptcy Discharge, the good news is that it’s easier than it ever has been before, and getting even easier every year.
Why? Because a series of recent court cases have begun setting precedents for including Federal student loan debt in the package of debt forgiven via Bankruptcy proceedings, and we’ve got several recent, telling cases where people successfully discharged their Federal loans.
There’s even been signs from President Trump and Education Secretary Betsy DeVos, who generally hate student loan relief programs, and who have tried to kill both PSLF and BDAR in the past, that they want to reevaluate the way Federal bankruptcies work, and perhaps start including Federal student loan debt as a component of the debt you can discharge by default!
The sad news is that things are moving slowly in this case, and that this is one of the only areas where it’s actually easier to get rid of Private student debt than Federal debt (Private loans are much, much easier to discharge in Bankruptcy, for whatever reason).
For the full details on how Federal bankruptcies work, please visit my Guide to Discharging Federal Student Loan Debt by Filing for Bankruptcy.
The Closed School Student Loan Discharge Program
The Closed School Loan Discharge Program is one of the best ways to eliminate debt left over from a school that shut down before you could finish your program.
Unfortunately, what that means is that this will only apply to a small percentage of borrowers – those borrowers who were still attending courses at the time the school closed, or within 120 days of the closure.
The good news is that Closed School Discharges are one of the only Federal relief programs that Betsy DeVos and President Trump have not attacked, and that they’re still being reviewed and approved in a relatively timely fashion, whereas PSLF and BDAR approvals are taking forever to get approved.
If you attended a school that shut down before you were able to finish your program, you’ll definitely have a good shot at getting the Discharge approved, and you should certainly visit my Guide to the Closed School Loan Discharge Program.
The Total & Permanent Disability Discharge Program
The Total & Permanent Disability Discharge Program offers immediate, complete relief from Federal student loans to anyone who wasn’t able to pay off their debt before they became totally and permanently disabled.
This program works for all sorts of Federal Loans, including:
- William D. Ford Federal Direct Loans (“Direct Loans”)
- Federal Family Education Loans (“FFEL Loans”)
- Federal Perkins Loans
- Teacher Education Assistance for College and Higher Education Grants (“TEACH Grants”)
There’s no more important Federal student loan relief program in existence, as obviously, anyone who is buried in student loan debt, but cannot work, doesn’t deserve to continue having to face the burden of making monthly payments any longer.
Even though I’m pretty conservative when it comes to my fiscal political outlook, I am 100% behind the existence of this program, and highly recommend that you take advantage of it if you should qualify for the benefit.
For full details on TPD Discharges, please visit the Federal Government’s official website on the Program at https://www.disabilitydischarge.com.
NOTE: Do NOT pay anyone to help you with a Disability Discharge! This is the single-most straightforward sort of forgiveness or discharge program around, and one that you can handle entirely on your own even if you have trouble understanding the requirements and application processes for the other Federal relief programs.
Anyone who tries to charge you for assistance with a TPD Discharge is highly immoral, and potentially a scammer. Do NOT give them your personal information!
Federal Student Loan Consolidation & Refinancing Programs
While there’s still no official program for Refinancing Federal Student Loans, you can get a new rate and often reduce monthly payments by turning several Federal loans into a single Federal Direct Consolidation Loan.
The thing to keep in mind is that Direct Consolidation Loans aren’t always a good idea, and only make sense for certain borrowers facing certain situations.
Why do I say that? Because Federal Consolidation can destroy your eligibility for powerful Federal relief programs, like the Public Service Loan Forgiveness Program, or Teacher Loan Forgiveness benefits, especially if you’re consolidating several different types of Federal loans.
Honestly, I would not consolidate your loans without doing a tremendous amount of research, and checking your plan across an absolute expert in student debt, like a CPA or Attorney who specifically specializes in handling student debt.
Do NOT consolidate your debt on a whim, simply because it’ll reduce your monthly payments, or save you the convenience of having to issue several checks each month, because again, the repercussions for making a mistake here can be massive.
For details on how the consolidation process works, advice on who should and should not consolidate, see my Guide on the Federal Direct Loan Consolidation Program.
Federal Student Loan Delinquency Assistance
Many borrowers find themselves facing Delinquency at some point in the lifespan of their loan, as a loan is placed into Delinquency as soon as you miss a single payment.
On the bright side, delinquency typically doesn’t lead to any major negative repercussions as long as you deal with the Delinquent payments quickly (within 15 days).
When your loans are moved into delinquency, your Student Loan Servicing Company will start issuing notices, warnings, etc., talking about what you need to do in order to prevent fines, fees and penalties from accumulating, and the trick here is that you need to get in touch with them right away to start doing whatever it is that they’re asking you to do.
Typically, that means paying whatever amount you owed, and promising that it won’t happen again.
For the full details on how delinquencies work, and for 5 great suggestions on dealing with them, please visit my Guide to Federal Student Loan Delinquency.
Federal Student Loan Default Relief
If your Federal student loans are moved into default status, then I’ve got some bad news: you’re about to get hit with a whirlwind of fines, fees and penalties, and you may even face some major financial repercussions, like lawsuits, tax offsets, and a seemingly endless stream of harassment from debt collectors.
You DO NOT want to let your Federal student loans default, no matter what you may think is a good reason for allowing it to happen, so please, don’t believe anyone who tells you that default is a good option for dealing with your debt.
Instead, please get the truth about how Defaults work, and how to deal with them, by reviewing my Guides on:
- Rehabilitating a Defaulted Federal Student Loan
- Preventing or Stopping a Federal Student Loan Wage Garnishment
Again, don’t let your loans go into default, no matter what!
If you neglect this advice, you’re going to wish you could turn back time later, because dealing with a default is just about the worst thing that you’ll ever have to do.
Federal Student Loan Deferment Programs
If you’re struggling to make your monthly payments on time, then you may want to look into the Federal Student Loan Deferment Programs on offer, because they allow you to effectively put your loans on pause.
What does pausing a loan do? It means that you’ll get a break from having to issue monthly payments, so you can get your finances in order and start saving up some funds instead of spending every penny you make on student debt.
Why doesn’t everyone just sign up for deferments and ignore their loans? Because there are downsides to deferments, especially for unsubsidized student loans, in that interest can accumulate while your loans are set on pause, and this can lead to owing much more money over the lifespan of your loan.
Deferments are slightly risky business, and should not be entered into unless you’ve researched all of your available options, determined the consequences of filing for a deferment, and determined that it truly is the best strategy for handling your loans, so please make sure to perform due diligence in researching this option before signing the dotted line.
Federal loan deferments are offered for a variety of reasons – and you do need a reason to enter into deferment, so the first part of the process for starting one is to determine which specific deferment program will work for you.
Get the full details on what types of deferments are available, how they work, and whether or not they may be a good idea for you by visiting my Guide to Federal Student Loan Deferments.
Federal Student Loan Forbearance Programs
Forbearances are a great way to get some breathing room from your student debt, as they allow you to put monthly payments on pause for a set period of time.
Working really similarly to Deferments, Forbearances have one huge advantage: they don’t allow your loans to accumulate interest, so you don’t have to worry about coming back after a Forbearance to a debt that has a ballooned in size.
Like Deferments, there are several different types of Forbearances, and you’ll need to review them to find out which one or ones may work best for you before applying to get one put in place.
To get the full details on how they work, what types are available, and whether or not you should consider applying for one, please visit my Guide to Federal Student Loan Forbearance Programs.
Federal Student Loan Repayment Plans
One of the best things about owing money on a Federal student loan as opposed to a Private loan is that the Federal Government offers you the choice of selecting how you’re going to pay the debt back.
In fact, you’ve got quite a bit of flexibility when it comes to choosing how you want to pay off Federal loans, in that you can opt for a plan that pays your loan off quickly over 10 years via high monthly payments, like the Standard Repayment Plan, or a much longer, income-based repayment plan like the Pay As You Earn Plan.
This variety and flexibility can be a life saver for anyone struggling to meet their monthly payments, and this is the first place I’d turn to getting Federal student loan relief if I were having trouble dealing with my debt, because it’s one of the fastest, easiest ways to change the amount you’re paying on a monthly basis.
Keep in mind that the Income-Based Student Loan Repayment Plans are especially powerful tools for reducing your monthly payments, and that they can be leveraged in combination with a Forgiveness program like the Public Service Loan Forgiveness Program to allow you to eliminate your student loans without paying a single penny.
How? PSLF requires you to make 10 years worth of full, on-time, scheduled monthly payments, and requires that those payments are made under one of the Income-Based Payment Plans, but it doesn’t stipulate that those payments have to be for any minimum amount, and some of the IBR plans allow you to qualify for a $0 monthly payment, as long as your income is low enough.
That may sound like some sort of scam, but it’s an incredibly powerful loophole that you just might want to look into, because it could mean the difference of being buried in Federal debt forever, and wiping out your loans without having to spend a single cent!
For the full details on each payment plan, which payment plans are best for certain circumstances, and suggestions on how to choose the right payment plan for you, please visit my Guide on Federal Student Loan Repayment Plans.
Where Can I Go For Other Questions About Student Loans?
Hopefully this Guide has already provided you with at least a couple ideas on getting Federal student loan debt relief, but if you have other questions about dealing with your loans, then you’ll certainly want to check out the other pages of my site.
For Federal Student Loan Relief, please visit my Guides on:
- Federal Student Loan Forgiveness Benefits
- Federal Student Loan Bankruptcy Discharges
- Federal Student Loan Consolidation Options
- Federal Student Loan Delinquencies
- Federal Student Loan Default Rehabilitation
- Stopping a Federal Student Loan Wage Garnishment
- Federal Student Loan Deferment Programs
- Federal Student Loan Forbearance Programs
- Federal Student Loan Repayment Plans
And if you need Help with Private Student Loans, then you will certainly want to visit my Guides on:
- Private Student Loan Forgiveness Programs
- Private Student Loan Consolidation Options
- Private Student Loan Bankruptcy Discharges
- Private Student Loan Default Help
For any other questions about student loans and student loan debt, please do feel free to ask in the Comments section below, as I review these on a daily basis, and will do my best to get you a response within 24 hours of posting.
I use a variety of sources to aggregate this website’s information about student loan debt, most of which are pages operated and maintained by the Federal Government’s Official Student Aid website, including:
- The Official Federal Student Aid Website – https://studentaid.ed.gov/sa/
- Federal Student Loan Forgiveness Programs – https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation
- Federal Student Loan Discharges & Cancellation Programs – https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation
- The Direct Consolidation Loan Program – https://studentloans.gov/myDirectLoan/launchConsolidation.action
- Understanding Delinquency & Default – https://studentaid.ed.gov/sa/repay-loans/default
- Student Loan Deferment & Forbearance – https://studentaid.ed.gov/sa/repay-loans/deferment-forbearance
- Federal Student Loan Repayment Plans – https://studentaid.ed.gov/sa/repay-loans/understand/plans
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Good evening! I hope all is well. I need advice, I’m a former student of Colorado Technical University and to say it was the worst mistake of my life is an understatement. When I realized something was wrong it was too late, I took out federal loans. I recently saw an article about a class action lawsuit because of their fraudulent practices. I’m not sure what I should do, reached out to the AG of Connecticut and was told to contact the department of education. There’s borrowers defense and forgiveness. I came across an article today mentioning they may be getting rid of or placing a hold on loan forgiveness. I just want to put this behind me and I’m not sure where to begin. There are many malicious sites out there that claim to offer “Help” its crazy how it’s so easy to get into this mess but nearly impossible to get out. Thank you for your time. Any advice you have would be greatly appreciated.
Yeah, so you can’t really join the class-action. If if covers you then you’re automatically part of it. You don’t have to do anything to become involved.
Tim, so glad I found your website. It’s helped to alleviate some panic attacks.
I’m trying to figure out the best plan of attack for what we have accumulated.
My wife has just over 100k from her master’s and doctorate. She’s finishing up her doctorate this year but since she’s now under part time the loan payment has kicked in. She has three different loans. Two from Great Lakes and one from Navient. Right now we have it set on the lowest payment (but highest cost over time)
Our daughter is also finishing up her freshman year of college. Her program is out of state so costs are considerably higher. We had to do the parent loan. Apparently there’s no way around that.. When all’s said and done, that’s going to be another 100k on top. That is through Fedloan servicing. Also there is a significantly smaller Fedloan from when our son went to college. Only one year in state. He decided college was not his thing. The Fedloan account is in my name.
Looking around it seems we have some options. My wife is a teacher. When she did her master’s and started her doctorate, she was at a title 1 school. Her new employer is also title 1.
My employer is a 501(c)(3). (a private university, not the one my daughter attends)
I want to make sure we get a handle on this. Should my wife combine her 3 loans into one? Are there options for forgiveness after x amount of time? It looks like I may have some options as an employee of a 501(c)(3) as well.
So, you mentioned who services your loans, but what matters more is… are they all Federal or Private? And if they’re Federal, what specific types of loans are they? That’ll determine whether or not you should combine hers into a Direct Consolidation Loan or not. This is a really risky prospect, because sometimes certain types of loans ARE eligible for specific forms of forgiveness, while others aren’t. You mentioned that your wife is a Teacher, so there’s a chance she may have a Stafford or even a Perkins loan… those come with special forgiveness benefits that would be taken away if you combined them with NON-Stafford or Perkins loans.
Here’s some parts of my site to take a look at, because they’ll all play into what you’re trying to do:
Finally, with all that said – this assumes your loans are all Federal, and NOT Private. If you’ve got Private loans, then we’d be looking at entirely different processes.
(Parent PLUS is definitely Federal, but I’m not sure about the others…).
Good luck! And let me know if you have any other questions! You seem like the type of person who will be able to figure this out and get everything squared away.
BTW – you may run across some old info in the Teacher sections of my site, so make sure to verify what you’re reading by speaking with your Loan Servicing Company. They’re the ones who always have the best information about what’s available NOW.
I borrowed a total of $13,000 between 1986-1988. It took me nearly 10 years to get a job that provided me with a living wage. I had applied for and was granted several deferments which I was very thankful for.
I called the department of education as soon as I started working. They replied very professionally consolidating my loans and giving me a payment plan of $167.00 a month, I could not have been more relieved.. My loans had increased due to penalties and interest to $22,000. I was okay with that considering the amount of time that had lapsed without my doing anything to help the situation..
I began paying as soon as the paperwork arrived. I paid for 4 years ( never missed) without problems. I even received a statement showing one loan was paid.
One day a letter arrived telling me that Federal Student Loans would no longer take my payments. I would be contacted with a new repayment company. I did not think this was alarming, but was I ever mistaken. It was way over a year before I heard from any loan company. When I did it was to ask me to refinance at a lower interest rate. I did not know what else to do. I signed the papers and sent them back only to receive my contract stating they added $10,000 to the unpaid balance. I now owed $30,000. I was paralyzed. It only became worse from there. The payments never were right. If I paid what they ask it never was enough. They called me at my work threatening me. Saying things like “can’t you read” and you had better start getting the payments right”. I am sorry to say I stopped paying., but they only sold my loans to another company. My loans have been up tp the amount of $50,000. In 2015 I started a dialogue with a new company National Recoveries. I would payments for 9 months and then someone else would buy my loan. I decided maybe we could come to some agreement. I paid the 9 months and as soon as the 9 months were up they started calling wanting personal medical information saying that my disability would not help me. I was not claiming any disability. I had major surgery and had paid for insurance to take the place of my wages until I went back to work. They said I was lying and to give them access to my medical. I would not give it to them. I ask what happened to the 9 months of payments. I said I held up my end and they told me I owed a total of $3, 600 o bring my contract current. I wrote the Department of Education, but received nothing but form letters back from them. I have written them so many times. I called the Ombudsmen for help and to get me to stop calling they said I needed to have doctor give me letter stating I am totally disabled. I have tried several doctors and they will not give it to because I am 73 years old.
I can not take this any longer. I tried to pay this and I wanted to pay but I was lied to at every turn. It is like they never wanted me to pay. Where would I get $40,000 living on a pension. However they are going to withhold 15% of my social security because I have failed to pay.
I can not do this anymore, I want this over and I do not know where to turn. I received a new loan company letter COAST Professional, INC wanting $41,007.16. According to them my principal No date any where to let me know when this all happened. The balance is $29,898.81, This makes no sense to me. Please, if you have any suggestions please.
There are a couple places where I’ve written about issues like yours that you may want to check for information, but I think the most important one may be the Guide to Stopping Student Loan Wage Garnishments.
You already talked to the Ombudsman Group, and that was a good idea because they are the experts, so I would try to take their advice and get that doctor’s note that says you are totally and permanently disabled. A Doctor would NOT avoid giving you that rating because of your age… so try again.
If you can prove that you are Totally and Permanently Disabled, then you’ll qualify for the Total and Permanent Disability Discharge, which will eliminate your debt entirely. That is the best path for you to pursue at this point, especially because of your age. I think it’s the only way you’ll be able to eliminate this debt entirely.
The only other option I can think of is to look into the possibility of getting a Federal Student Loan Discharge via Filing for Bankruptcy, but that is a huge long-shot that requires a lot of legal work, and potentially costly lawyers services.
Okay so I went to school at ITT Tech from 2010-2013 and I got my associates in criminal justice. I was a waitress so I didn’t make much money and when I signed up for college I was told that my credits would be transferable, they could place me in a job making 90,000 a year, and due to me not making much as a waitress I would get more grants than student loans. I don’t feel that it’s right that now they are close, I don’t have a official transcript and if I wanted to further my education I would have to start all over again and pay out of pocket. I owe $61,000 dollars and I could have my doctorate for that kind of money. I had my son shortly after I finished at ITT, then I got diagnosed with stage 3 breast cancer and I’m finally better. I’m trying to figure out how in the world I can get this handled or if anybody can help me understand this?!!
I would look into filing an application for a Borrower’s Defense Discharge against the school. Read my page on the BDAR Program (previous link) for details on how to fill out the application.
I make $14,000 a year before taxes. I receive $636 monthly in social security. I am a a paraprofessional with an AA degree in Education. I am 67yrs young. My husband is 72 and has several different cancers. i have had to take deferment many times. I have put my charge accounts under debt consolidation and then found out they can not add my college loans of $8000. i am trying to work one more year due to all the insurance premiums I pay to keep all our medical bills paid up. I pay premiums of almost $600 a month for medicine, hospital, etc. Plus I drive 80 miles 5 days a week to work. We pay into Uncle Sam an extra $2000 a year on April 15. My husbands credit is great. His pension and social security pays most house and car payments, auto insurance, many of extras. I want the college loans at least consolidated so that i pay less interest but the payments more reasonable. I am trying to keep him out of my debt problems. I do not want to ruin his credit. HELP
I would contact as many consolidation companies as I can and ask them for proposals, then consolidate with whoever offers you the best interest rate and loan conditions. I think you’re going to need to do some shopping to find someone who will agree to take your account on though, as it gets harder the older you are and the less money you make.
Looking for some guidance… my husband has Federal student loans totaling 68,000 and we have used up all the Deferments/Forbearances that we could. These are from before 2009. He only makes about $32,000 a year but since we are married they count both of our incomes. We have debt problems and are enrolled in a debt relief program for credit cards, among other issues. And my mother in law is now living with us. They told us that they cannot lower his payment, currently $337, told me it is the same even though we are now supporting his mother. We are close to default (about 3 weeks) and they are saying they will garnish our wages or take us to court. Is there anything at all that we can do. There’s just no way we can afford to pay that much right now. And when I asked if I could pay a smaller amount to keep from default, they said it wouldn’t make any difference. Also, does it make any difference if he didn’t actually get his degree??? They let him walk on graduation but he still had 1 class left to take and he never got it done. I really hope you can help us. Thanks!
Sorry to hear about your situation, but it does kind of sound like you’re in a tight spot here. I’m not aware of anything that would help get rid of the debt even though your husband never finished his degree… the Government and law would say that was his fault for not going back to finish the final class.
I do think you could try to have your Mother in Law living with you as a dependent, which may allow you to decrease the monthly payment amount if you’re enrolled in an Income-Based Repayment Plan, but from what you’ve explained it sounds to me like you have Private Loans?
The reason I say that is the way that Delinquency and Default works. Federal loans become Delinquent the minute you miss a payment, but they don’t go into Default until you’ve been Delinquent for 270 days (or 9 months), whereas Private loans go into Default the minute you miss a payment.
What I would advise you do is check out the following pages of my site:
I think these pages should help you find answers to your questions, and help you come up with a plan for how best to proceed here. I wish I could offer more specific advice, but this is about the best I can do.
I currently have over $60,000 of parent plus loans through Navient for our daughter. I am paying $800.00 per month for the past 2 years and seeing no reduction.
Are there any debt forgiveness programs that parent plus loans would qualify for? I am not sure the debt forgiveness of paying $800.00 for 20 years would work, since it would be way more than the loan.
Unfortunately, Parent PLUS Loans are one of those loan types that have sort of slipped through the cracks when it comes to finding effective relief. For whatever reason, most of the amazing student loan forgiveness programs specifically exclude Parent PLUS Loans from eligibility. I am not sure why this keeps happening, but it’s definitely been the track thus far when it comes to forgiveness. Sorry to be the bearer of bad news, but I do think you’re most likely stuck with paying back the full loan balance, plus interest.
I just wanted to take a moment and thank you for your efforts here. Student loans are a racket. You are helping to change that or at least encourage change and for that you rock. I’m a 37 year old attorney with two small preschoolers in Florida, I have $446k in student loan debt (current balance after years of interest accruing), I make $83k/ year. I have signed up for the Repayment program and it is my hope that this program stays for the 20 years that I have left making payments. My loans accrue almost $3k in interest a month. My payments without the repayment program are more than I bring home every month. I did the math and by the time my loans are forgiven , they will total almost $1.2 million (and I will need a bankruptcy for the tax bill). When I obtained my degrees, I always truly believed I would make enough to cover the payments but not even close. There are times when I feel so foolish for “making something of myself.” There may not be any bankruptcy options for me but it sounds like strides are being made for many others. Keep up the good work.
Thank you so much for your kind words. I really do appreciate it.
I don’t think you have to worry about losing access to the Income-Based Repayment Plans. Even if President Trump’s Student Loan Reforms do away with the existing repayment plans and replace them with his new option, you’ll still be grandfathered into the previous plans, and remain eligible to use Pay As You Earn or REPAYE, whichever one you’re already on, for the rest of your loan term. However, here’s something else you may want to consider… I see two really good potential options for dealing with your debt…
First, I’d highly recommend looking into the Public Service Loan Forgiveness Program, because that lets you discharge your debt after just TEN YEARS of payments, and DOES NOT come with a tax bill on the forgiven amount. If you can find a way to swing a job in Public Service (any role as a Government Employee or as a Non-Profit Worker will count), then this is your best path to getting rid of the debt.
Second, you could also try filing for a Bankruptcy Discharge, but it’d be a massive long-shot in your case because no court is going to rule that you’re anywhere near the poverty line. The only way I think you MIGHT be able to win a Bankruptcy discharge would be to get the court to agree that it’s literally impossible to pay off your debt because of the interest accrual, and even though $83,000 seems like a huge salary to most people, compared to $500,000 in debt which is accruing over $3,000 a month… the Math just doesn’t add up. Check out my pages on Federal Student Loan Bankruptcy Discharges, and Private Student Loan Bankruptcy Discharges (I’m guessing you have a mix of the two) for details on the tests you’d have to overcome in order to get approval for a discharge. I would not offer this advice to most people, but since you’re an Attorney, perhaps you could handle the process yourself? Or have someone you know take care of it for you? It may be worth a shot BECAUSE you understand the legal system, and won’t have to pay someone else to take care of everything for you.
Just a couple thoughts. Hopefully something helps because no one deserves to be buried under a mountain of inescapable debt. Good luck!
My husband and I have spousal consolidated federal student loans with Navient. They were consolidated years ago when the mortgage and real estate crisis was upon us. My husband is a mortgage banker and I was a realtor. Essentially our income went to next to nothing and we had to file bankruptcy. Our loans were continually put into forebearance which was agreed to by Navient and ourselves. We had no other recourse. The original principal was $76,306.94. Now after several forebearances due to many family medical issues and not having enough money to pay these loans they are $172, 371.30. We are 52 years old now and have to start paying these in Oct at $1701.67 a month for 167 months. This will have them paid off in 2032. Help please!
You should consider filing for bankruptcy and attempting to get these loans forgiven in bankruptcy at this point. Unless you qualify for one of the Federal Forgiveness Programs, I think that may be your only option for relief.
I’m a nurse at the VA hospital in Atlanta, Georgia. I have a Masters degree in nursing. I’ve worked in a Federal government facility for the last five years. I owe approximately $100,000 in federal student loans. My monthly loan debt is $600. In 10 years I plan to apply for the Nursing Student Loan Forgiveness. However, in the meantime, is there a free resource that I can inquire about a reduction to my monthly loan debt? My husband works only part-time and I have two sons. My budget is very tight. Please help.
Can someone please call me? [Phone number redacted] I have questions. Max
Sorry Max, but I don’t offer phone support. I’m providing these resources for free and I do not have time to get on the phone with everyone who has questions.
I received financial aid throughout school up through my Master’s. The debt I took on was $62,000.00 and after graduating 2 years ago I entered my repayment plan. My repayment plan is income-driven and I plan to qualify to the Public Service Loan Forgiveness as my Master’s is in Public Administration. In the meantime my total student debt is climbing since the payments are low. This has impacted me negatively when I recently went to buy a home and found out the way they evaluate income-driven student loans when calculating your debt to income ratio is ridiculous and they no longer take into consideration your actual monthly obligation, but use 1% of your total student loan debt. This makes my “monthly expenses” calculate as if I have $700 (approx.) in student loan payments. I get that my loans will be forgiven in 8 more years but in the meantime, buying a home is out of the questions and knowing that the deb is growing which will never allow my DTI to be healthy until the forgiveness kicks in seems like a very unfair trade off. It doesn’t seem economically smart in the long run to feverishly get my student loans down to buy a home now when in the long run thats money wasted. Please help me understand the rationale to this and are there smarter ways to handle the debt that won’t have lasting impacts like a delayed ability to purchase a home?
I don’t have any insight on the formula used to determine Debt to Income ratios, but I’d ask a loan officer to explain it to you. The banks are being much more heavily regulated now than ever before, because of the 2008 housing crisis, and it’s likely that things will get even WORSE moving forward, since everyone has become gun shy due to the fallout from 2008’s disaster.
I attended college for a management degree from 2012-2015. Do I qualify for any loan forgiveness?
Yes! You should qualify for forgiveness benefits under the newest of the Federal Student Loan Repayment Plans, called the REPAYE Program. Check out the details for REPAYE here.
My student loans were from 2005. I am currently retired from the DCANG. And was under the SLRP program when I re-enlisted in the Guard. I was in the Guard for 8 years and only three years of my Student loans were paid. I was told by our retention personnel that they were 3 years behind in re-payment. And waited and waited for a response of what they were going to do to compensate me because I kept forebearing awaiting for the lump sum that was never paid. My Federal Student loans started at 26,000. and now 2 years after my retirement they are still at 27-28000. what can I do to find out about reimbursement or payment? Because once i retired I became a non -issue.
You should contact the Student Loan Ombudsman Group. This is a legal cooperative that offers free advice to people struggling with Federal Student Loan Debt, and they may be able to advocate on your behalf to get compensation from the military. You can reach them here: 1-877-557-2575.
I am 62 and there are NO programs I fall under. I work PT as a nursing educator at a local college and work per deim at a local hospital. I owe 15,000 in student loans. Do U know of any programs I fit into? Thank You
Working part time is the biggest problem, as most of the best Federal Forgiveness Programs require full-time employment. Check out my pages on Nursing Student Loan Forgiveness, and the Public Service Loan Forgiveness Program to see what sorts of benefits are available to Nurses and Nurse Educators. Maybe you could move to full-time employment and qualify for one of these packages?
Also – you should qualify for at least one of the excellent Income-Based Federal Student Loan Repayment Plans (like the REPAYE Plan), which will help reduce monthly payments and put you on the slow track to Federal Forgiveness. REPAYE offers complete forgiveness after you’ve made 20 years of qualifying payments, which is definitely better than nothing.
Finally, the last thing you could try is contacting a private company like the Student Loan Relief Helpline, who offers assistance in lowering monthly payments and applying to forgiveness programs. This company charges for the services they offer, but you could probably get a couple minutes of free advice just by telling them your situation and asking about what options they think would work best. You can reach the Student Loan Relief Helpline here: 1-888-694-8235.
My loans are from before 2005. I tried to make a payment plan of $50 a month, at the time I was a single mom and not making a lot of money. They told me if I sent them $50, they would send it back! That wasn’t enough. I have a creditor that just today called everyone in my family and even called my neighbor that just moved in, who, doesn’t even know me. Is this legal? Is there any help for me? I hate to make any payment as the school I went to lied about credits being able to be transferred to another college. I couldn’t transfer them to anywhere except their sister school!!!
You may be able to take advantage of the Defense Against Repayment Provision – type that phrase into Google and see if you think it’ll apply to your specific case. If the school really did lie about transfer credit eligibility, you may be able to get out of paying back the debt.
On the creditors part – different states have different laws about what they can and cannot do. Check out the laws in your state to see if that’s legal. It sounds like harassment to me, and I think you may be able to go after them, or at least halt them from doing the same sort of thing again, by making legal threats.
Hmmm. Sounds like a familiar situation. The same thing happened to me. At the admissions conference we were told that our credits would transfer to another college. After about a year, I enrolled in a college closer to home only to find out the credits would not transfer. Later on I found out the financial aid advisor was fired due to embezzling students financial aid. A lawyer was investigating the situation and some of the students loans were forgiven. I contacted the lawyer regarding my loan but never heard back from him.
One can’t win for trying.
If you were lied to when enrolling in classes then you may be able to file a Defense Against Repayment Discharge, and have all of your student loans wiped out. Do NOT give up on this if you really were told that your credits would transfer.
Hi thank u for great info… I finally understand most of these new changes/laws… I was recently contacted and paid$600 to have my 2 federal loans consolidated under the IBR plan quoting me a $302 a mo payment vs my current $905 and was told it would be forgiven after 240 months. I had 23 years on the loans and now they’ve consolidated for another 30 year repayment term of $550 a month. They claim I gave them less income than what IRS has even though I read #s off my 1040 return… I’m more concerned that the 240 mo forgiveness won’t apply to me as I read in your page that it’s only for loans taken out after October 2007. My loans were all taken prior to that as I graduated May 2007. Does this mean they totally messed up my life???
You shouldn’t have had to pay anyone to consolidate Federal Student Loans. Anything that they can do, you could have done yourself, for free.
Also, that company was not honest with you – since your loans were from before 2007, you were not eligible for the 20 year forgiveness program.
However, even though you were scammed, your life is not ruined, and you are still in a better position than you were in previously (your payment has gone down, and even though your loan term went up, if you paid the same amount each month you’d end up paying the loan off earlier anyway – right?).
What I would recommend doing is watching Federal law developments closely, because we are supposed to be getting an update to Federal Student Loan Debt Forgiveness laws that would allow everyone, regardless of when their loans were taken out, to qualify for forgiveness after 20 years of payments.
When that new law goes into place, your IBR-based payments will start counting toward the 240 month threshold, and you’ll be on your way toward receiving forgiveness.
So, to summarize. You should not have paid someone to consolidate your Federal student loans, and yes, they were lying to you, or at the very least were wrong about what they promised they could do.
BUT, on the bright side, your life is not “totally messed up”, and you’re in a better situation than you were previously.
I am a graduate student with huge debt. We are a low income family, my husband works for the state, and we have three kids. I will graduate next year and am worried sick that more education was not a wise choice, due to debt. Who do I call about finding the right program for us?
There’s really no one to call. You need to read through the options available and find out what you qualify for.
You could try calling whoever services your loan, as they are legally obligated to inform you of any benefits that you’re eligible to receive, but a lot of the time they simply don’t know, and aren’t able to help.
It’s time to buckle down and do some research of your own. I would start by looking into the Obama Loan Forgiveness Program, and the Pay As You Earn Student Loan Repayment Plan.
Maybe consider Public Service Loan Forgiveness, and see if you can find a job that qualifies (this program offers total student loan debt forgiveness after just 10 years of making monthly payments).
My husband let his loan go to collections and we were checking these out and now know that these companies are scams, who do we call or contact to get the Obama student loan forgiveness program?
From what I am reading you basically call your loan company and make arrangements or you just pay what you can afford and then after doing this for 25 years how do you apply for loan forgiveness?
Thanks for any assistance.
Is your husband’s loan Federal or Private? If Private, then Obama loan forgiveness benefits won’t help.
If it’s Federal, then you’ve got to get the loan back out of collections before you’re going to be able to get any assistance with it. When a Federal loan is in default, you basically have no benefits available at all.
how about parent plus loan? I have over $200K parent plus loan that has been in forbearance but is now about to end. My payment will be over $2,000K. What should I do? I won’t be able to afford it. I was hoping my son will be able to help us out but he can’t afford his own student loan either as he does not have a good paying job right now. Please advise. Thanks!
I’m sorry, but I’ve got bad news. Parent PLUS Loans aren’t eligible for much at all, unfortunately. I’m not sure why they’ve been left out of the mix, but they basically don’t qualify for any of the other relief programs on offer.
I would look into Deferment options if I were you, or into the possibility of having the loan discharged by filing for bankruptcy.
Why did you take out such a huge loan for your son? $200,000 is a ridiculous amount of money to borrow, especially if you didn’t have a solid plan in place for paying it back.
Tim, how do you know what program (s) this was taken out to pay for?? $200,000 may sound “ridiculous” to you, but try getting a doctorate or PhD from any school in the country. If you can’t afford to pay tuition, that’s what you will owe. It really irks me when people who are in dire straits and looking for options to dig themselves out are met with ignorance and judgments from people who have no idea what the circumstances are. Your statements sound like assumptions that this money was taken out for “fun”. Unfortunately, the advice you DID give is also not very helpful, seeing as discharging in bankruptcy is all but impossible and you can only defer for a short period of time.
No one should be borrowing more money for school than they expect they’ll earn during their first year after graduation (except perhaps for Doctors, Lawyers, Engineers, or some other STEM field).
PhD’s are simply not worth what they used to be (from the strict financial perspective), and investing hundreds of thousands of dollars into a PhD program is almost always a bad idea these days.
However, I agree that everyone is free to make their own decision about how far into debt they want to go, but when somebody borrows way too much to get over-educated, or educated in a field that isn’t going to allow them to earn enough money to pay back their debt, then they are going to have to learn to live with the consequences.
I’m all about helping people figure out how to deal with the unique and challenging financial situations that result from excessive student loan debt, but I’m also trying to warn others who may be considering making very poor decisions about their own financial future.
Sometimes my responses will include a bit of tough love, or harsh realism. I’m doing my best to help people out here though. I apologize if you didn’t find my comment useful to your specific situation and I wish you the best.
I am enrolled (I think) in the IBR plan w salliemae now navient At the rate I am going I will need the full 25 yrs and then some… Can u explain this plan better. I appreciate the monthly payment being affordable but the interest just keeps growing. After 25 yrs of paying will the excess really be “forgiven”
Contact Sallie Mae to ask them which Repayment Plan you’re enrolled in. If you aren’t “sure” about it, then you should make sure because it will have a major impact on getting out of debt.
The way it works is that no matter how much interest is accumulating, all you have to do is keep making your monthly payments for 25 years, and then your debt will be forgiven.
So, even if you only originally borrowed $10,000, but you end up owing $50,000 after making 25 years’ worth of monthly payments, that $50,000 debt is written off.
However, keep in mind that you will have to pay taxes on the amount of money written off, so it’s not like the debt just disappears.
Also, for additional details – check out my page about the Obama Student Loan Forgiveness Program, and the Pay As You Earn Student Loan Repayment Plan (which you should try to get onto because it’s a better plan than IBR).
These pages will help flesh out the details of the how Federal Student Loan Forgiveness works.
On the same tangent as Rachel’s inquiry. You mentioned that the private company’s cannot do anything that you cannot do for yourself… but how exactly would I do it myself?
I have $15,000 in Subsidized loans and I got contacted by one of these company’s who offered me their services, which includes a $500 upfront service fee and $35 monthly fee with zero monthly payments towards my loans. This is opposed to my current $130 payment to my loans…
Is there a way to do the same for myself i.e. no loan payment or service charge?
Sounds like they are looking to take money for you to sign you up for a forbearance or deferment, or to get you signed up on one of the Income-Based Repayment plans (assuming your income is so low that your monthly payment would amount to $0).
Deferment and forbearance would make your monthly payments $0 for a while, but you’d end up having to pay the loan off eventually anyway, and have wasted the $500 plus $35 monthly on their worthless ‘service’.
To find out what’s possible, contact your lender (whoever you send your monthly payments to) and tell them you’re interested in getting enrolled on one of the income-based repayment plans.
See what your monthly payment would amount to, then decide if you should pursue a forbearance or deferment (but remember those are just temporary solutions!).
I have been paying a Sallie Mae consolidated student loan for what seems like forever, after graduating in 2001. I am trying to start saving money for a middle school child who will be entering college in 4 years. How does the Obama Student Loan Forgiveness Loan Program work and do victims of Hurricane Sandy have any relief?
Unfortunately, your loans are not covered by the Obama Student Loan Forgiveness Program, because the current law stipulates that only loans taken out since October 1st, 2007.
Also, no, as far as I know, there is no student loan assistance program specifically for victims of Hurricane Sandy.
There is no reason to pay any company to reduce Federal student loan debt. Anything they are claiming to be able to do, you could do yourself for zero costs.
This does not sound legitimate to me. Question though – are your loans actually Federal, or are they private?
It IS possible to get help with private student loan debt (via consolidation, etc.), but again, there’s nothing that these debt consolidation companies can do that you can’t accomplish on your own.