Friday, December 1, 2023

Federal Government Student Loan Repayment

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Howdoes Public Service Loan Forgiveness Work

Fact or Fiction: where federal student loan repayment stands today

The second type of student loan forgiveness available to federal employees is the Public Service Loan Forgiveness plan . While the federal government student loan repayment program is targeted at specific positions, PSLF is for all government employees . As the PSLF website states, The PSLF Program isnt about the specific job that you do for your employer. Instead, its about who your employer is.

The PSLF Program isnt about the specific job that you do for your employer. Instead, its about who your employer is.

Public Service Loan Forgiveness allows eligible federal employees to have some of their federal student loans forgiven. Only certain types of loans are eligible for forgiveness. For example, eligible loans include loans received loans under the William D. Ford Federal Direct Loan Program, Federal Perkins Loans, and loans administered under the Federal Family Education Loan Program . Additionally, the PSLF can forgive Direct Consolidation Loans that you may have used to consolidate other types of federal student debt.

Eligible loans are forgiven only after you have made 120 qualifying payments on an income-driven repayment plan. Additionally, only payments made on an income-driven plan count towards earning loan forgiveness. You should also know that if you paid on your loan while it was deferred or in forbearance, the payment wont count towards the 120 qualifying payments.

Crushing Student Loans Affecting Retirement Plans For Parent Borrowers

But a few years passed before she realized her mistake: Her loans were being handled by a servicer that didn’t qualify her for the program. She then switched servicers, but at one point, after years of making payments, she was told some of them didn’t count, and the ever-tightening rules of the program were frustrating.

“It seemed like they were building the plane while we were on it,” Saunders said.

But her fortunes reversed in December, she said, after she reapplied for relief after the Biden administration altered some of the program’s requirements. She learned her outstanding debt $106,000 was wiped clear, and she also received credit for a few months in which she paid more than she needed to.

“I couldn’t breathe when I saw the zero balance,” Saunders said. “You know how your life is supposed to flash by you as you’re dying? It was kind of like that only now I could see a potentially different life in front of me. One where I could buy a car or maybe take a summer off for once.”

The stress of her student loan obligation while working as a teacher, getting her doctoral degree and also making house payments and meeting other financial burdens felt crushing as she tried to sock away for retirement. She said she remains cautious.

“Even trying to put more in now that the loans are gone is going to mean I work until 70 likely,” said Saunders, 56. “And it’s not gonna be a luxurious retirement even at that age.”

What The Federal Student Loan Forbearance Extension Means For You

The federal student loan pause was previously scheduled to end on May 1, 2022. But on Wednesday, the White House announced an extension of the program to August 31, 2022.

Since the forbearance took effect more than two years ago, federal student loan borrowers have not had to make payments on their debt and interest rates have been set to 0%. Collection efforts on defaulted loans have also been suspended during this time.

This marks the sixth time the forbearance has been extended. When the Covid-19 forbearance program was first introduced, it was meant to only last six months. However, the former Trump administration extended that timeline twice, and the Biden administration has offered additional extensions four times.

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Can You Get A Student Loan Forgiven

Canadian students with provincial or federal student loans are lucky to have the Repayment Assistance Plan . This program allows the federal and provincial government to share the cost of a loan with the student, who will only have to pay back what they can comfortably afford. While most cases involve reduced payments, students may also have the option of not making any payments during individual 6-month periods.

The problem is that the Repayment Assistance Plan cant actually get your student loan forgiven. Dont worry, because there are several loan forgiveness programs that you can apply for in Canada, including the ones below.

Learn how to pay off your student debt quickly.

Select A Repayment Plan For Your Federal Student Loans

Pin by My Education Solutions on Student Loan Debt Free ...

Within the grace period you may receive information about repayment from your lender. Youll have a choice of several repayment plans. Find the right one for you.

Most federal student loans are eligible for at least one income-driven or income-based repayment plan . These repayment plans are based on a percentage of your discretionary income. Theyre designed to make your student loan debt more manageable by reducing your monthly payment amount.

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Q Who Is Doing All This Borrowing For College

A. About 75% of student loan borrowers took loans to go to two- or four-year colleges they account for about half of all student loan debt outstanding. The remaining 25% of borrowers went to graduate school they account for the other half of the debt outstanding.

Most undergrads finish college with little or modest debt: About 30% of undergrads graduate with no debt and about 25% with less than $20,000. Despite horror stories about college grads with six-figure debt loads,only 6% of borrowers owe more than $100,000and they owe about one-third of all the student debt. The government limits federal borrowing by undergrads to $31,000 and $57,500 . Those who owe more than that almost always have borrowed for graduate school.

Where onegoes to school makes a big difference. Among public four-year schools, 12% ofbachelors degree graduates owe more than $40,000. Among private non-profitfour-year schools, its 20%. But among those who went to for-profit schools,nearly half have loans exceeding $40,000.

Among two-year schools, about two-thirds of community college students graduate without any debt. Among for-profit schools, only 17% graduate without debt .

You Have Options If You Were Denied Pslf

If your application for PSLF was denied, you may be able to receive loan forgiveness under the Temporary Expanded Public Service Loan Forgiveness opportunity.

As part of this opportunity, the Department of Education reconsiders your eligibility using an expanded list of qualifying repayment plans.

This TEPSLF opportunity is temporary, has limited funding, and will be provided on a first come, first served basis. Once all funds are used, the TEPSLF opportunity will end.

Visit for detailed information on how to be reconsidered for loan forgiveness.

Limited PSLF waiver: The U.S. Department of Education in October 2021 announced a temporary period through October 31, 2022, during which borrowers may receive credit for payments that previously did not qualify for PSLF or TEPSLF.

Get additional information on >

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Public Service Loan Forgiveness Program Could Clear Debt For Thousands Of Americans

Cody Hounanian, the executive director of the Student Debt Crisis Center, a nonprofit organization that advocates for student borrowers, said the sudden notices of discharged debts are a blessing for many applicants who dutifully made the required 120 monthly payments or were on course to and yet were denied because they were inadvertently enrolled in the wrong payment plan or had the wrong type of loan or due to another technicality.

“It’s very emotional,” Hounanian said of the wave of financial assistance. “It’s changing their lives for the better.”

Student borrowers who have benefited in recent days are sharing their shock on social media.

But the latest reversal is also a “double-edged sword” for many borrowers, Hounanian said.

Those hoping to qualify will have until Oct. 31 to submit an application form under a limited-time waiver. Potentially 550,000 borrowers stand to benefit, the federal government said. In addition, student borrowers who may previously have been disqualified because they had a loan through Federal Family Education Loans, a program that ended in 2010, are now eligible. The catch is they will have to make sure such loans are consolidated into a new, federal direct loan.

“Unfortunately, there are some folks who with this news that debt relief is attainable may find the process confusing,” Hounanian said.

But the federal government said it is trying to simplify the steps, with about 22,000 borrowers initially having their debts automatically canceled.

You’ve Got Options If You Were Denied Pslf

Student Loan Repayment Plans for Federal Student Loans

If your application for Public Service Loan Forgiveness was denied, you may be able to receive loan forgiveness under the Temporary Expanded Public Service Loan Forgiveness opportunity.

As part of this opportunity, the Department of Education reconsiders your eligibility using an expanded list of qualifying repayment plans.

This TEPSLF opportunity is temporary, has limited funding, and will be provided on a first come, first served basis. Once all of the funds are used, the TEPSLF opportunity will end.

Visit for detailed information on how to be reconsidered for loan forgiveness.

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Changes To The Public Service Loan Forgiveness Under President Biden

On October 6, 2021, the Education Department announced a set of actions to increase eligibility for PSLF and forgive more student loan debt for federal employees.

One of the biggest changes to the program introduces a a time-limited waiver so that student borrowers can count payments from all federal loan programs or repayment plans toward forgiveness. Prior to this announcement, federal employees who had refinanced federal loans were not eligible for PSLF.

Other changes announced in October of 2021 include:

  • Allowing more payments to count as qualified towards the 10 years of payment under PSLF
  • Expanding eligibility for military service members regardless of loan payment status during active duty
  • Automatically comparing the list of federal employees and military members against the list of federal student loans to help more people access PSLF
  • Simplifying the application process to PSLF and re-examining previously denied PSLF applications.

More details of these changes can be found on the Department of Educations website.

Deferring A Federal Student Loan

When you defer your federal student loan, you are reducing or postponing payments. You may want to request a deferment if you return to school, go to graduate school, or enter an internship or residency.

During deferment, you wont need to make any loan payments. However, if you have Federal Direct Loans, interest will continue to accrue , which will increase your Total Loan Cost.

To request a federal student loan deferment, contact your student loan servicer. If you dont know your servicer, you can find out who it is in the National Student Data Loan System.

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Limited Public Service Loan Forgiveness Waiver Opportunity

On Oct. 6, 2021, the U.S. Department of Education announced a change to the Public Service Loan Forgiveness program rules as a result of the COVID-19 national emergency. Throughout the pandemic, the U.S. Department of Education has provided a variety of benefits to borrowers.

Now, for a limited period of time, borrowers may receive credit for past payments made on loans that would otherwise not qualify for PSLF.

Please visit the Federal Student Aid website for a complete listing of new rules around qualifying payments, waiver requirements, the employment verification process, and more.

Bc Loan Forgiveness Program

Broward Teachers Union

Students with specific essential occupations can get their British Columbia student loans forgiven if they agree to work for a publicly-funded facility in one of the provinces under-served areas or with children in an occupation that has a shortage of workers.

Are you struggling to make ends meet? Consider applying for BCs social assistance program.

If eligible, the BC Government will forgive the provincial portion of your Canada-B.C. integrated student loan at a maximum rate of 20% yearly for 5 years. Once you finish 5 years of qualified work, a percentage of your student loan will be forgiven, along with the interest generated during each year youre registered in the program.

Eligibility For The B.C. Loan Forgiveness Program

You can qualify for student loan forgiveness in BC if you:

  • Are currently paying off a B.C. student loan
  • Have graduated from an accredited post-secondary educational facility
  • Are not enrolled in any full-time post-secondary studies
  • Work an acceptable amount of in-person hours
  • Are or will be employed in an eligible full-time, part-time, on-call and/or casual occupation at a publicly-funded facility and working with children or an under-served community
Eligible Occupations In Under-Served Communities In BC
  • Audiologist
  • Teacher Educator
  • Teach of the Visually Impaired or Deaf/Hard-of-Hearing

Do you live with a disability? Get extra financial aid through BCs disability assistance program.

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K Borrowers Receive Student Loan Relief Through Limited Pslf Waiver

The Public Service Loan Forgiveness program allows public servants to discharge the remaining balance of their federal student loans after making payments on their debt for 10 years. In October 2021, the Biden administration overhauled the program to give borrowers credit for past periods of repayment that previously didn’t count, which resulted in $5 billion worth of student loan discharges for 70,000 borrowers.

To qualify for PSLF, borrowers must meet the following eligibility requirements:

  • Work full-time for a nonprofit organization or a federal, state, local or tribal government
  • Have federal Direct Loans or move other federal loans into a Direct Consolidation Loan
  • Make 120 qualifying payments under an income-driven repayment plan

This federal student loan repayment program is available to select teachers, nurses, government employees, military service members,lawyers and law enforcement personnel, as long as they work for a federal agency or in a nonprofit setting. If you believe you qualify, you’ll have to verify detailed information of your employment history through employer certification.

Will Student Loan Debt Be Canceled

A number of Democrats are pressing President Joe Biden to cancel up to $50,000 in student loan debt, including Senate Majority Leader Chuck Schumer and Senator Elizabeth Warren. Soon after taking office, Mr. Biden said that Congress would need to act to cancel student loan debt. But in the spring, the president asked the Education Secretary to outline his legal authority to cancel student loan debt.

“We’re working very hard with the Justice Department and the White House to look at our potential legal authority, and those conversations are ongoing,” said Kvaal.

Even as a determination has yet to be made, the administration has taken some steps to wipe out certain student debt. Since January, the administration has approved the cancellation of more than $12.5 billion in student loans affecting roughly 640,000 borrowers, according to the Education Department. That includes discharges for permanent disabilities, those found to have been defrauded by schools, and forgiveness for public service.

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Q Which Student Loan Borrowers Are Most Likely To Default

A. Accordingto researchby Judy Scott-Clayton of Columbia University, Black graduates with abachelors degree default at five times the rate of white bachelors graduates21%compared with 4%. Among all college students who started college in 200304 , 38% of Black students defaulted within 12 years, comparedto 12% of white students.

Part ofthe disparity is because Black students are more likely to attend for-profitcolleges, where almost half of students default within 12 years of collegeentry. And Black students borrow more and have lower levels of family income,wealth, and parental education. Even after accounting for types of schoolsattended, family background characteristics, and post-college income, however, thereremains an 11-percentage-point Blackwhite disparity in default rates.

How To Explore Federal Loan Repayment Options On Your Own

How Arizona residents can repay federal student loans

Step 1:Create your FSA ID and log in to to review information about your loans.

Step 2: Learn aboutincome-driven repayment plans. Under income-driven repayment plans, payments are based on income and family size and can be as low as $0 per month. Income-driven repayment plans also offer potential interest subsidies and the possibility of loan forgiveness after 20 or 25 years of qualifying payments.

Step 3: If you work for the government or a qualifying nonprofit organization, learn about Public Service Loan Forgiveness and Temporary Expanded Public Service Loan Forgiveness . These programs have many detailed requirements but enable public servants to receive forgiveness of their remaining loan balance after 10 years of qualifying payments in a qualifying repayment plan. On October 6, 2021, the U.S. Department of Education announced a temporary period in which borrowers can receive credit for payments that did not previously qualify for PSLF or TEPSLF. However, you may have to take action by October 31, 2022. Learn more about this time-limited opportunity.

Step 4: Use the U.S. Department of Educations Loan Repayment Plan Simulator to estimate your monthly payments, the projected total costs, and potential forgiveness amounts under income-driven repayment plans and/or the PSLF program.

Step 5: Apply for an income-driven repayment plan through or mail the application to your federal loan servicer with your income documentation.

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What To Do If You Don’t Qualify For Student Debt Forgiveness

The Education Department has canceled about $16 billion worth of student loan debt since Biden took office for more than 680,000 Americans who qualified for programs like PSLF, borrower defense to repayment and closed school discharges.

However, the vast majority of borrowers have not yet received the broad student loan forgiveness Biden promised on the campaign trail. Plus, about 2.4 million borrowers with private student loans wouldn’t benefit from widespread debt cancellation measures.

If you haven’t benefited from federal student loan forgiveness, you may consider these alternative debt repayment strategies:

Keep in mind that refinancing your federal student loan debt into a private loan would make you ineligible for IDR plans and select federal student loan forgiveness programs. But if you don’t plan on utilizing these benefits or if you already have private student loans that aren’t eligible for federal protections then you may benefit from refinancing to a lower interest rate.

You can compare student loan refinance rates from private lenders in the table below. Then, you can use Credible’s student loan calculator to determine if refinancing is the right strategy for your financial situation.

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at and your question might be answered by Credible in our Money Expert column.

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