Michael Weaver has long struggled under the weight of his student loan debts, which equal roughly a quarter of a million dollars.
The substance abuse counselor, whom his mother describes as “compassionate,” couldn’t imagine a debt free future, let alone being in a position to help his daughter achieve her academic dreams.
That all changed when Weaver appeared on Going for Broke, a reality show that helps Americans overcome their financial burdens. In an episode that aired on November 11th host Tonya Rapley calls in student loan expert Bobby Matson, the founder and CEO of Payitoff, to help Weaver manage his debts.
Matson explains that he started the company because he and his wife similarly faced six-figure debts that prevented them from starting a family.
After looking into Weaver’s situation, Matson discovered that he was eligible for the Public Service Loan Forgiveness program, which offers tax-free loan forgiveness on federal student loan debt for those who have worked as a public servant for ten years or more. Since Weaver was well past the point of eligibility, he was able to have his entire $250,000 balance wiped clean.
“Now I’ll be able to help my daughter go to college,” Weaver said after hearing the news. “This is the best news besides her being born.”
Weaver is just one of the millions of Americans who may be eligible for a student debt relief program. Today roughly 44 million Americans owe a combined $1.75 trillion in student loans, but the recently announced Student Loan Relief Program will take a big chunk out of that debt for most borrowers.
Under the program the Department of Education is providing $10,000 in debt relief to all borrowers and $20,000 to Pell Grant recipients who qualify under its income requirements. Specifically, the program applies to those who earned less than $125,000 as an individual, or under $250,000 as a household for married couples in 2020 or 2021. With the relief, however, also comes a resumption of payments, which will kick-start in January after a multi-year pandemic pause.
Here are a few steps borrowers can follow in order to take back control of their student loans before payments resume.
1. Apply for the Federal Student Loan Debt Relief program ASAP.
In order to have your loans discharged before payments resume, you need to apply now. It doesn’t matter whether you’ve been actively repaying your loans, are in school, a grace period, or default — as long as you have eligible federal student loans and meet certain income requirements. You can learn more about those eligibility requirements and ten complete the debt relief application on FSA’s website (the debt relief application is open, but the debt discharge has been paused). You can also check your eligibility for free via Payitoff’s debt relief eligibility tool.
2. Know who your student loan servicer(s) are.
Your student loan servicer handles billing and other services on federal student loans on behalf of the federal government, and are often able to provide borrowers with repayment options they might not know are available to them. For example, some loan services provide income-driven repayment plans and loan consolidation, which can help make outstanding debts more manageable. They can also help retrieve usernames and reset passwords for those that have lost track of their credentials during the lengthy payment pause. Those with multiple loans might even have more than one. To find your servicer, visit your Federal Student Aid (FSA) account dashboard and scroll down to the “My Loan Servicers” section.
3. Review and update contact information and payment preferences
In order to help you stay on top of your student loans your service needs up to date contact information, and given the length of time since the last payment many Americans are in need of an update. Make sure your loan servicer has your correct address, phone number and email address, and don’t forget to review your payment preferences — especially your autopay settings — before payments return in January. If you haven’t used autopay before it might be time to consider enrolling, as enrolling in auto-pay for federal loans can help you save.
4. Explore options to lower your monthly payments now.
In order to take a bite out of your monthly federal student loan payments consider applying for an Income-Driven Repayment plans. These programs are designed to ensure your monthly payments stay affordable based on your income and family size. In order to lower the monthly payments for private student loans, consider refinancing with a private lender.
If you, like Weaver, aren’t sure where to start or are in need of some assistance you can similarly access Payitoff’s personalized, automated debt guidance to find the best steps for your student loans for free; Just don’t expect the CEO to deliver your solution in person.
Text “JOIN” to +1 (323) 591-5880 or click this link to receive some free guidance around managing your student loan debt.