Here’s how to qualify for $8.1 billion of student loan forgiveness.
Here’s what you need to know — and what it means for your student loans.
The U.S. Department of Education has approved $8.1 billion of student loan forgiveness for public servants since October, according to the Wall Street Journal. That’s exciting news for student loan borrowers who have struggled to get student loan cancellation under the Public Service Loan Forgiveness program. This news comes days after the U.S. Department of Education canceled $6 billion of student loans for 200,000 student loan borrowers. If you want student loan forgiveness, it’s essential that you learn the requirements so that you can qualify. Public service loan forgiveness is available to all federal student loan borrowers and is one of the best ways to get student loan forgiveness. Here’s how to qualify:
How to qualify for student loan forgiveness
To qualify for public service loan forgiveness, follow these 7 steps:
1. Full-Work Employment: Work full-time (at least 30 hours a week) for a qualified public service or non-profit employer. If you don’t work for a qualified employer, consider changing jobs so you can qualify for student loan forgiveness.
2. Employer Certification: Complete an Employer Certification Form annually or whenever you change employers, and then submit it to the U.S. Department of Education.
3. Direct Student Loans: Make sure you have Direct Student Loans. Login to Federal Student Aid to verify what type of federal student loans you have.
4. Student Loan Consolidation: If you have federal student loans such as Perkins Loans or FFELP Loans, these are not Direct Loans. However, you can consolidate your federal student loans to get a Direct Loan. Contact your student loan servicer to consolidate your existing federal student loans into a Direct Consolidation Loan.
5. Income-Driven Repayment: Enroll in an income-driven repayment plan. There are four main income-driven repayment plans: Income-Based Repayment (ICR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE) and Income-Contingent Repayment (ICR).
6. Student Loan Payments: Make 120 monthly student loan payments. At least a majority of student loan payments must be made while enrolled in an income-driven repayment plan.
7. Student Loan Forgiveness: Get student loan forgiveness on your remaining federal student loan balance.
Student loan forgiveness: how to qualify for a limited waiver
Biden, who has canceled $25 billion of student loans, announced major changes to student loan forgiveness to help more student loan borrowers qualify for student loan forgiveness. The U.S. Department of Education introduced a one-time limited waiver, which will enable borrowers to get “credit” for prior student loan payments that previously were ineligible to count for student loan forgiveness. For example, student loan borrowers can now count the following prior student loan payments toward the 120 monthly student loan payment requirement: late student loan payments, partial student loan payments and student loan payments made under the wrong student loan repayment plan. You don’t need to apply for a limited waiver. Rather, the Education Department automatically will update your account to reflect the additional student loan payments. There are approximately 9 million student loan borrowers who qualify for student loan cancellation through public service loan forgiveness. However, only 15% of borrowers have filed paperwork to track their progress toward public service loan forgiveness.
Student loan borrowers are still awaiting Biden’s decision on wide-scale student loan cancellation. Biden could cancel student loans for millions of student loan borrowers. This could include, for example, $10,000 of student loans or $50,000 of student loans. Alternatively, Biden could cancel a different amount or forgo any wide-scale student loan cancellation due to inflation concerns. Temporary student loan relief is scheduled to end on August 31, 2022. This means student loan payments for federal student loans will restart beginning September 1. Make sure you’re prepared for student loan repayment. Here are some popular options to pay off student loans and save money:
- Student loan refinancing (lower interest rate + lower payment)
- Income-driven repayment (lower payment)
- Student loan forgiveness (federal student loans)