Government Assistance For Student Loan Repayment

Federal Scholarships And Grants

The federal government offers many different education grants which do not have to be repaid. Most of these grants require a showing of financial need.

Federal grants include Federal Pell Grants and Teacher Education Assistance for College and Higher Education Grants. You need to submit a Free Application for Federal Student Aid to be considered for federal grants.

Learn more about Federal Scholarships and Grants on Federal Student Aid, an office of the U.S. Department of Education.

Putting Loan Forgiveness In Fiscal Perspective

In terms of its scale in budget and cost to taxpayers, widespread student loan forgiveness would rank among the largest transfer programs in American history. Based on data from the Department of Education, forgiving all federal loans would cost on the order of $1.6 trillion. Forgiving student debt up to $50,000 per borrower would cost about $1 trillion. Limiting loan forgiveness to $10,000, as President Biden has proposed, would cost about $373 billion. Under each of these proposals, all 43 million borrowers would stand to benefit to differing degrees.

To put those numbers in perspective, the chart below compares the cost of these three one-time student loan forgiveness proposals against cumulative spending on several of the countrys largest transfer programs over the last twenty years .

Forgiving up to $50,000 of student debt is similar in cost to the cumulative amount spent on Supplemental Security Income and all housing assistance programs since 2000. Supplemental Security Income provides cash assistance to 8 million people who are disabled or elderly and have little income and few assets. Recipients must have less than $2,000 in assets. About half have zero other income.

Fixed Vs Floating Interest Rates

You can request to have a fixed interest rate. You can only make this change once. Contact the NSLSC or the Alberta Student Aid Service Centre for more information.

To compare the cost of choosing floating and fixed rates, use the Government of Canadas loan repayment estimator.

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Can Student Loan Interest Be Forgiven

Yes, its possible to forgive student loan interest instead of the loan itself, and this has been proposed in Congress. This format of forgiveness could call for borrowers to repay only what they originally borrowed, or only what remains on their balance and not a cent more, since their loans would no longer accrue and capitalize interest. To date, however, no major forgiveness program in existence has been focused specifically on interest as opposed to the entire balance of the loan.

For Student Loans Received After August 1 2000

If you received loans after August 1, 2000 they are a joint federal-provincial student loan .

You will repay your student loans through the National Student Loans Service Centre .

• Around 45 days before you enter repayment, the NSLSC will send you a consolidation agreement combining all your loans you received after August 1, 2000 so you can make one payment.
• Make sure you understand the terms of the consolidation agreement and choose the repayment options that are best for you.
• Sign and return the consolidation agreement to NSLSC.

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Private Loan Repayment Plans

Private loan repayment terms vary by lender and by contract. Check your loan agreement for the repayment terms of your private student loans.

Tip: While most private loans go into default after 120 days of non-payment, check your private loan agreement or call your loan servicer to discuss your repayment options and how you can avoid default.

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Federal Perkins Loan Cancellation

If you took out a federal Perkins loan to pay for school, you could qualify for loan cancellation in a variety of ways. The Perkins loan cancellation and discharge program typically forgives a certain percentage of student loan debt after every year of service. Over time, you could get up to 100% of your Perkins loan canceled.

Whos eligible?

Perkins loan cancellation is a popular program among teachers, as many people who work in education might qualify. You might be a teacher, librarian, speech-language pathologist or another type of education professional.

Other eligible occupations include, but arent limited to:

• Firefighters

You might also qualify if youre in the military.

What are the requirements?

You must have a federal Perkins loan and work in a qualifying profession, and most recipients work full time for at least one year. Additional eligibility requirements vary by profession, but they often involve working in a high-need or critical shortage area.

How do you apply?

To learn more about Perkins loan cancellation and apply, speak with your loan servicer and schools financial aid office.

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How Do Student Loans Affect Loan Debt In Canada

Most university students graduate with student loan debt. The average student loan debt for both Bachelors and Masters graduates is about $28,000.

Student loans make up a significant portion of the average Canadians debt. The average student debtor owes about $46,000 in debt, with almost $15,000 of that debt in student loans. Thats almost a third of someones entire debts.

Debt load is higher for students in Ontario, with $2,301.5 million in student loans for both part-time and full-time students. Graduates in Alberta also face high student loan debt, with $503.3 million in Canada Student loans.

How To Explore Federal Loan Repayment Options On Your Own

Step 1:Create your FSA IDand log in to studentaid.gov 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.

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

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Student Loan Repayment Assistance Programs For Teachers

The Teacher Loan Forgiveness program isnt your only option for student loan help many states also offer loan repayment assistance for teachers. Most of these programs require state licensure, as well as a commitment to working for two years in a qualifying area.

To find programs in your state, check out the full list of loan repayment assistance programs and filter the results by occupation.

How Long Does It Take To Get Your Student Loans Forgiven

It varies significantly by program. Most federal loan forgiveness programs take years to dispense relief, and it could be as long as a decade, at least in the case of PSLF. Other non-federal forgiveness programs might award borrowers relief after two to three years of working in an underserved area or field. In addition, employers may offer to match or help make your monthly loan payments, in which case relief would be felt immediately and frequently.

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Federal Student Loan Interest Rates

Interest rates vary by type of federal loan. The following table shows applicable interest rates for each type of federal loan:

Some federal student loans also have origination fees, which are paid proportionately from each loan disbursement.

Department Of Justice Attorney Student Loan Repayment Program

The ASLRP is a program for Department of Justice employees. Under this program, the Justice Department will repay certain types of federal loans for highly qualified attorneys in exchange for a three-year service obligation. Eligible recipients can get up to $6,000 per year to repay their loans.

Note: Typically, ASLRP benefits are taxable as income. However, the CARES Act temporarily changed how taxes are handled with student loan repayment programs. Under the CARES Act, up to $5,250 in ASLRP benefits is tax-exempt through Dec. 31, 2026.

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Federal Student Loan Forgiveness

The federal government administers many of the career-based forgiveness programs weve mentioned already, but the following are either not tied to your job title or apply to a wide range of professions.

Public Service Loan Forgiveness : Weve this program. The upshot is that you can get the remainder of your federal student loans forgiven after 10 years or 120 qualifying payments, if you work for a qualifying government or nonprofit employer.

Under this program, there are a lot of hoops to jump through. It matters more who you work for than your job title doctors, lawyers, teachers, and many other professionals could qualify for forgiveness.

Income-Driven Repayment Plan Forgiveness: There are four different kinds of income-driven repayment plans, and they all set your federal loan payments based on a percentage of your income. After 20 or 25 years, the remainder of your balance will be forgiven, but you’ll have to pay taxes on the forgiven balance.

Perkins Loan Cancellation: Weve already listed a Perkins loan forgiveness program for teachers, but the federal government will also forgive your Perkins loan if you choose other careers. See the website for a complete list.

Cancellation and Discharge: The federal government may also discharge your loans under some extreme circumstances, including:

• You became total and permanently disabled during military service

How Do You Receive Credit For Past Payments Under The New Rules

For a limited time, borrowers may get credit for past payments made on loans that would otherwise not qualify for the Public Service Loan Forgiveness program.

There are two requirements to receive additional qualifying payments: Full-time employment and loan consolidation.

For instance, you must have worked full-time for a qualifying employer when prior payments were made, according to Federal Student Aid.

Some part-time workers may qualify under certain circumstances. Say you were employed in more than one qualifying part-time job at the same time. You would be considered full-time if you worked a combined average of at least 30 hours per week.

It may take several months for a borrower’s account information to reflect the new payment count, according to Federal Student Aid.

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Grants For Members Of The Military

Army Loan Repayment Program: If you enlist in the military after going to college and you have student loans, you can get forgiveness for those loans.

Army Reserve College Loan Repayment Program: This program provides up to $50,000 in student loan forgiveness for those in specific specialties who agree to serve for at least six years.

If you agree to serve for three years and meet other qualifications, you can get a third of your outstanding principal paid each year, for a maximum of $65,000.

Iraq-Afghanistan Service Grant: If your parent was a member of the military and died while serving in Afghanistan or Iraq, and you were not eligible for a Pell Grant based on financial criteria, you could be eligible for an amount up to the maximum Pell Grant amount available for the award year. The amount for 2020-21 is $6,345..

You must have been under 24 years of age or enrolled at least part-time in college when your parent died.

Health Professions Student Loan Repayment Program: Doctors, dentists, pharmacists, nurses, veterinarians, and other healthcare professionals who enlist in the army can receive up to $120,000 in student loan forgiveness if they enlist for a specified amount of time, usually three years. The amount and time period vary by profession and service branch.

In addition, the military offers special student loan forgiveness programs in:

Student Borrower Bill Of Rights

Student loan servicers are often the most important points of contact for student loan borrowers. They send your monthly bills and process your loan payments, and they are also supposed to answer your questions and help you figure out the best way to repay your loans. For these reasons, when student loan servicers dont do their jobs well, borrowers suffer. In 2019, New York passed the Student Loan Servicing Act, which gave DFS authority to license and regulate student loan servicers and to ensure that they treat borrowers with the respect and professionalism they deserve.

The law also created new protections for borrowers and their co-signors. These rights are described in the New York Student Loan Borrower Bill of Rights as follows:

Every Student Loan Borrower In New York Has The Right To:

If you apply for financial aid to attend schools in New York, schools must send you a uniform financial aid award information sheet so your family and you can easily understand the costs of an education, make informed financial decisions, and compare financial aid offers from different schools. These financial aid award letters must include certain information, such as the total cost of attendance for the upcoming year, estimated cost of attendance for any subsequent years needed to earn a degree, total grant and scholarship awards, expected loan amounts, and the schools graduation rate, loan default rate, and average student debt.

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Who May Need To Consolidate Their Loans

If you have Federal Family Education Loan Program loans, Federal Perkins Loans or other types of federal student loans that arent direct loans, you must consolidate them into the direct loan program by Oct. 31, 2022, according to Federal Student Aid.

This is important for borrowers because you can’t receive credit for payments if you consolidate after that date. Once the consolidation process is complete, you must then submit a PSLF form to your loan servicer.

The help tool on the Federal Student Aid website will be updated in the coming months to process applications for borrowers in the Federal Family Education Loan Program and those with Perkins loans.

Right now, employment can still be verified for them in Step 1 of the help tool, and loan consolidation can still be requested, Federal Student Aid said on its website. But an application for the Public Service Loan Forgiveness program through the tool may not be available in the near term for those borrowers.

Finding Your Loan Information

If you are unsure which agency is servicing your defaulted student loan, you may retrieve your loan information from the National Student Loan Data System . This system contains financial aid information collected from schools, agencies, and other educational institutions. You will need your Federal Student Aid ID information to access your account. Or, you may contact the Federal Student Aid Information Center .

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Circumstances For Student Loan Discharge

• Permanent disability or death
• Unauthorized signature of the loan by the school without your knowledge
• False certification of student eligibility
• Unpaid refund, which is when you withdrew from school and it didnt return the required loan funds to your loan servicer
• School closure while you were enrolled

Discharging student loans through bankruptcy is extremely rare. It is technically not impossible, but demonstrating undue hardship is very difficult. Read more about the differences between forgiveness and discharge.

Air Force College Loan Repayment Program

The main Air Force College Loan Repayment program is paused in 2018 . This program allowed you to get up to $10,000 in student loan debt paid off in 3 years.

However, the Air Force JAG student loan repayment program is still active. You can receive up to $65,000 in student loan forgiveness if you go into JAG in the Air Force.

You can learn more about this program here.

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Grants For Doctors Nurses And Other Healthcare Professionals

National Health Service Corps: This is one of the most commonly-known grant programs for people in the medical field, including doctors, dentists, and mental health professionals.

The deal is simple: sign up for two years of full-time work within a high-needs community, and get up to $50,000 off your student loans. Reimbursement for part-time work is also possible. See the funding levels here.

Nurse Corps Loan Repayment Program: There are many state-based grants to pay off student loans for nurses this is the main one at the national level.

The program will pay off 60% of student loan debt for registered nurses who work at least two years in a critical shortage area. Those who opt to work an optional third year may receive an additional 25% in reimbursement.

IHS Loan Repayment Program: This program will repay up to $40,000 of your qualifying student loans if you sign up for two years of service in American Indian and Alaska Native communities.

If you choose to stay longer, you could keep renewing your contract until your entire physician student loan debt is paid.

Students-to-Service Loan Repayment Program: If youre in your final year of medical or dental school, you could earn up to $120,000 in student loan repayment by agreeing to work in an area with a shortage of medical professionals for three years after you graduate.See also: Student Loan Forgiveness for Doctors and Medical Professionals

Default Federal Student Loans

Most federal student loans go into default after nine months of non-payment. You may face the following consequences if you default on your federal education loans:

• Your unpaid loan balance and accrued interest are immediately due and payable.
• You will no longer be eligible for deferment or forbearance.
• You cannot receive new federal student aid while an existing federal student loan is in default.
• Your loan may be assigned to debt collector for collection.
• You may be sued to recover the debt.
• Your wages can be garnished. .
• You can lose your tax refunds .
• Your credit may be negatively impacted.
• For certain loans, the Department of Education may require you to make payments under the Income-Based Repayment plan or Income Contingent Repayment plan.

You have rights under New York State and federal law when dealing with debt collectors. Contact DFS if you believe that a debt collector has violated the law.

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