Final Thoughts On Managing Your Student Loans
If youre struggling to repay your student loans and work for a government agency, student loan forgiveness for federal employees might sound too good to be true. However, this repayment program is real, so ask your employer today if youre eligible to receive the funds for your loans. Speaking up could save you money.
Want more ideas for student loan forgiveness? Check out this complete list to find even more options.
Rebecca Safier and Anne Bouleanu contributed to this report.
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State Programs And Incentives
Some states even offer incentive programs that arent tied to specific careers and although they may not be student loan repayment grants specifically, they could still help free up some money to make ends meet and repay those debts.
For example, Maine offers loan assistance to some taxpayers living in the state through their innovative Opportunity Maine tax credit. Tulsa Remote, a program in Oklahoma, offers remote workers who move to the city a $10,000 cash grant to put toward buying a home.
Also, note that many of these programs only apply to federal student loans, so if you have private student loans you may need to look for other solutions when it comes to getting help with repayment.
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How To Get Your Student Loans Forgiven: Three Paths
Cancelling student loan debt is a popular subject in todays climate, but its been a popular topic for more than 20 years and 45 million people still owe $1.7 trillion.
That could change if Biden and Congress reach some sort of compromise on how much to cancel and qualifying requirements.
In the meantime, option No. 1 for student loan forgiveness is having a job that serves the public good. If youre a teacher or police officer or firefighter or social worker or health care worker or government employee who kept up with payments for 10 straight years, youve got a good shot. If you are a sign spinner or pet psychic, forget it.
Option No. 2 is through a repayment plan that is based on your income. You will still have to pay a large chunk of your debt over a long period, but under the current laws, a portion will be forgiven at the end.
Those options are available for federal student loans.
Option No. 3 is called a discharge and its available for federal or private loans, but you probably dont want to go there. A discharge is when you cant repay the loan for a variety of reasons, like death, disability, fraud, identity theft or bankruptcy.
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How To Find Free Grants And Programs To Pay Off Student Loan Debt
Know where to look for free grants that can help you pay for your student loan debt. Here are some places that have loan repayment programs:
- Organizations that promote certain professions or skills
- State and federal governments
- Colleges and universities
Check the eligibility requirements to know if you qualify in a loan repayment program. Prepare all the necessary documents and send your applications. Make sure that you understand all the terms and conditions. Some grants can become a loan if you dont meet service requirements, for example.
Nurse Corps Loan Repayment Program
Administered by the Health Resources & Services Administration, the nurse corps loan repayment program pays up to 60% of outstanding student loan debt for eligible registered nurses, advanced practice registered nurses and nurse faculty.
If selected for the award, you must commit to work in either a designated critical shortage facility or an eligible nursing facility as nurse faculty for at least two years.
Benefits received through this program are taxable as income.
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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.
Unable To Repay Student Loans
If you cant pay the full amount due on time or have to miss a student loan payment, your loan may be considered delinquent and you may be charged late fees. Contact your loan servicer immediately for help, and ask them about your options.
Learn about COVID emergency relief for federal student loans that has been extended through January 31, 2022.
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Private Student Loan Relief
Private lenders typically offer opportunities to pause payments for up to 12 months or longer with forbearance or deferment policies. These policies vary from lender to lender and, unlike current federal loan forbearance, interest will continue to accrue.
But some lenders are offering additional relief options, including short-term emergency forbearance or deferment. Others are waiving or refunding fees for late payments.
Many lenders are continuing relief plans into 2021.
When in doubt, contact your lender to find out what options are available.
Grants For Military Members Or Their Surviving Families
If you have student loans and your parent served in the military and died while deployed in Afghanistan or Iraq following the 9/11 attack, you may be eligible for an Iraq and Afghanistan Service Grant. You may receive loan repayment assistance of up to $6,345, which you can use to pay off your student loan. Visit the Federal Student Aid website for more information about the eligibility requirements and application procedures.
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Compare Education Funding Sources
It can be difficult to determine how to best finance your education. While everyone’s specific circumstances are different, there are some general rules of thumb to consider in choosing a suitable aid package.
Compared to private loans, federal loans offer:
Include Payments In Your Budget
Build your student debt payments into your budget and make payments that are larger than the minimum payments. You can also speak with your financial institution about setting up automatic payments.
When planning your budget and automatic payments, make sure you know when your payments are due. Remember that if you have more than one loan or line of credit, you may have more than one payment due date.
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Grants To Pay Off Student Loans For Single Mothers
This one is a bit difficultthere arent a lot of student loan forgiveness programs specifically for single mothers.
However, if youre a single mom who needs student loan debt relief, any of the above may be an option depending on your career, the state you live in, and other circumstances.
Which leads us to…
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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Student Loan Forgiveness Alternatives
The qualifying standards for student loan forgiveness eliminates many of the 45 million borrowers, but there are other avenues to pursue that might make repaying your debt a little less challenging.
The most obvious one for federal loans is to sign up for one of the income-based programs. These programs adjust your monthly payment based on your income, so if youre not making much, you arent required to pay much.
The historically low interest rates in 2020 were a prime time for borrowers to examine whether refinancing their student loans made sense. Some borrowers were able to get rates at 3% APR and that reduced their monthly payment to a manageable level. Be aware, however, that if you refinance a federal student loan, you will lose the many options federal programs offer.
If your money crunch is temporary, you can ask that your loans be deferred or place in forbearance. This allows you time to reorganize financially so you can meet monthly payment responsibilities.
About The Author
Q If So Many Students Are Struggling To Repay Their Loans How Much Are Taxpayers On The Hook For
A. For many years, federal budget forecasters expected the student loan program to earn a profituntil recently. In its latest estimates, the Congressional Budget Office expects the program to cost taxpayers $31 billion for new loans issued over the next decades. And that figure uses an arcane and unrealistic accounting method required by federal law. Using an accounting method that calculates the subsidy to borrowers from getting loans from the government at rates well below those theyd be charged in the private sector, the cost to taxpayers is $307 billion. And that largely excludes the cumulative losses already anticipated on loans issued prior to 2019.
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The Most Generous Agencies
In case youre wondering, the most generous agencies with student loan repayment benefits are the Department of Defense, the Department of Justice, the Department of State, and the Securities and Exchange Commission. In 2013, more than 73% of all student loan repayment benefits were provided by these agencies, and more than 70% of all student loan repayment recipients were employed by these four agencies.
But again, I cant stress enough how widespread these benefits are. Theyre now available at 85 federal and independent agencies. So if youre job hunting or already working at one of these places, do check out the federal and quasi-government organizations listed above to find out about their student loan repayment benefits.
What If You Default
You should try to avoid defaulting on your student loans. A default will negatively impact your credit score and your ability to obtain credit in the future. But if you are unable to avoid default, you may have options to help repair your credit and get you back on track. You can consider contacting your servicer to discuss your options and ask them to work with you toward a sensible solution.
While each person’s particular situation is different, below you will find some general information regarding default and your post-default options:
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How To Search For Free Grants
Most grants to pay off student loans are offered by federal and state government agencies. To find free grants, use the following resources.
- Federal government. Use GovLoans to find potential loan repayment programs and grants.
- Professional associations. Professional organizations, such as the Association of American Medical Colleges and the American Dental Association, maintain databases of available scholarships, loan repayment programs and grants.
- State education agencies. Many states have their own grants and student loan assistance programs. Visit your state education agenciesâ websites to find opportunities relevant to your profession.
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.
Who Can Get This Aid
To be eligible for RAP, you must:
- Be a resident of Canada
- Have student loans that are in good standing and not be restricted from repayment assistance for other reasons.
- Have an affordable monthly payment that is less than the required monthly payment:
- Your affordable monthly payment is calculated based on your gross family income and family size
- Your required monthly payment is calculated based on the total amount of your government student loans.
If your affordable payment is less than the required payment, and you meet all the other eligibility requirements for RAP, you will make only the affordable payment for six months.
Note: Your reported family income is subject to income verification. You may be required to provide supporting documentation.
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How Do I Pay Off My Student Loan Debt Fast
Join millions of Canadians who have already trusted Loans Canada
While there are many ways to get a well-paying job, the vast majority require some form of higher education and education costs money. The cost of living continues to rise, and many opt for post-secondary education to improve their chances of economic success. There are available measures to reduce your expenses, such as using savings and applying for scholarships and grants. However, many Canadians still require student loans to afford tuition. Student loans are accessible, and often the only way some individuals can access higher education.
Since the average individual with a degree makes roughly 1.7 times more than those without one, it truly is an investment in your future. Of course, that increased salary doesnt show up overnight. In the meantime, you must address your student loans, lest you damage your credit. The good news is that you can pay them down surprisingly quickly if you are diligent and savvy.
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Resolve Student Loan Disputes
If you and your loan servicer disagree about the balance or status of your loan, follow these steps to resolve your disputes:
1. Talk with your loan servicer
You may be able to solve a dispute by simply contacting your loan servicer and discussing the issue. Get tips on working through an issue with your loan servicer to resolve the dispute.
2. Request help from the FSA Ombudsman Group
If you have followed the guide and still cannot resolve your issue, as a last resort, contact the Federal Student Aid Ombudsman Group. The FSA Ombudsman works with student loan borrowers to informally resolve loan disputes and problems. Use FSA’s checklist to gather information youll need to discuss the dispute with them.
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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