Tuesday, June 28, 2022

Government Programs To Pay Off Student Loans

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Air Force College Loan Repayment Program

Government launches new website to help pay off student loans

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.

Student Loan Repayment Assistance Programs For Other Careers

Most state LRAPs award loan assistance to professionals in exchange for two years of service. The most common occupations are doctors, nurses, teachers and lawyers, but some other career paths qualify, too.

Several LRAPs for doctors, for instance, help out pharmacists and veterinarians. Other programs, like the Alfond Leaders Program in Maine, award people in STEM careers.

Even if youre not a doctor, nurse, teacher and lawyer, check your states offerings to find out if it has a loan repayment assistance program for you.

How To Find Money For College

Grants are just one option of how to find money for college. Grants are typically need-based and awarded based on your financial situation. You can also research scholarships, which also do not need to be repaid, but are based on your merit. Even if you do not qualify for financial aid, you can pay for your education with scholarship opportunities.

Every branch of the U.S. Military offers educational benefits that service members can take advantage of during or after service. If you feel like joining up, you can access financial aid, college funds, and loan repayment programs.

A more modern way to raise money for college is Crowdfunding. With a crowdfunding campaign on sites like GoFundMe and Indiegogo, students can ask their friends, relatives, and communities to invest small amounts in their future without asking any one person for a large amount of cash.

Employer reimbursement is also another option depending on where you work. Many private companies now offer up to $10,000 in college tuition reimbursement disbursed over several years of employment.

Your first step should always be to fill out the FAFSA to see if you qualify for federal grants and financial aid, which have the best benefits associated with them.

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Student Loan Discharge Options

There are also ways to get your student loans discharged in some circumstances. We consider student loan discharged to be a little bit different than forgiveness, both due to the nature of the way the loan is eliminated and the potential taxability surrounding it.

There are various discharge options you may qualify for.

Loan Forgiveness For Nurses

4 Tips for Paying Back Student Loans

Registered nurses, nurse practitioners and members of nursing faculty, who work in high-need population areas or areas where there is a critical shortage could qualify to have up to 85% of their loans forgiven under the NURSE Corps Loan Repayment Program.

Qualified candidates can have 60% of their student loans forgiven for working two years in an underserved area. Another 25% could be forgiven for working three years.

Some states also offer loan repayment assistance. Go to the Loan Forgiveness for Nurses website to see if yours is one of the 33 states that has one and what the eligibility requirements are.

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National Health Service Corps Loan Repayment Program

The National Health Service Corps offers aid for certain medical professionals. You may be eligible for the National Health Service Corps Program if you:

  • Work as a primary care doctor, dentist, or mental health professional
  • Work at an NHC approved site for at least 2 years
  • Are eligible to provide service for those on Medicare or Medicaid

You must have unpaid student loans before you apply. They can be undergraduate or graduate student loans. The student loans must also be in repayment.

You are ineligible if:

  • You default on your federal loans
  • You have any federal liens against you

Full-time recipients may receive between $30,000 and $50,000 for loan repayment. Recipients working half-time may receive between $15,000 and $25,000.

All recipients receive payment in one lump sum. They receive it within 90 days of the contracted start date.

You can reapply for the program after you satisfy the 2-year requirement. As long as you work in an underserved area, you may remain eligible. Some recipients receive enough to pay all of their student debt.

Private Scholarships To Pay Off Student Loan Debt

Yes, there are actually some private grants that will help you pay off your student loans! While most of the other grants have a service requirement, these grants and scholarships have no such strings. Here are a few that you might be eligible for:

  • Eligibility: Open to college graduates who are paying back student loan debt. Parents who took out student loans for their children who have graduated are also eligible!
  • Amount: $2,000
  • Eligibility: Open to college students who are at least 18 years old
  • Award: $4,000
  • Eligibility: Anyone with student loan debt
  • Amount: $10,000
  • Eligibility: Open to all high school students, college students, community college students, and graduate students.
  • Amount: $1,000
  • Deadline: November 30, 2021

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Pay More Than The Minimum Amount

If you have the capacity, increasing the amount of your monthly payments will help you get out of debt faster. Whats more, the amount you pay above the minimum payment will go toward paying off the principal of the loan. Even better, this will help to reduce your balance and thus reduce the amount of interest you will have to pay.

Teacher Loan Forgiveness Program

This program is paying off student loan debt

Student loan forgiveness for teachers is neither generous nor easy to qualify for. Teachers can have up to $17,500 of their federal direct and Stafford student loans forgiven by teaching for five complete and consecutive academic years at a qualifying low-income school or educational service agency. Loans that were issued before Oct. 1, 1998, are not eligible.

You must be classified as a highly qualified teacher, which means having at least a bachelors degree and having full state certification. Only science and math teachers at the secondary level, and special education teachers at the elementary or secondary level, are eligible for $17,500 in forgiveness. Forgiveness is capped at $5,000 for other teachers.

You can qualify for both teacher and public service loan forgiveness , but you cant use the same years of service to be eligible for both programs. So youd need 15 years of teaching service to qualify for both programs, along with meeting all the specific requirements to earn each type of forgiveness.

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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.

Keep An Eye On Due Dates

Bear in mind that many grants are given out on a cycleand theres usually a deadline every year.

If you missed the deadline on a grant that looks like it would be a good fit, check when it will open again and set a calendar reminder to apply. Its best to do this early in the cycle, as many grants have limited funds and are first-come, first-served.

Want another way to reduce your student loan burden? Check out this refinancing tool to see how much you could save by refinancing.

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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 toâ¦

Can You Get Grants If You Have Defaulted Student Loans

Federal Student Loans: Three Ways for Relief

Unfortunately, defaulting on your student loans makes you ineligible for federal aid, such as federal loans and Pell Grants. If you have defaulted in the past but consolidated your debt or otherwise gotten out of default, you will become eligible for federal assistance again.

While you won’t be eligible for federal grants or aid if you’re currently in default, you may still qualify for private grants. Most private grants to pay off student loans will still be available to you even if your loans are in default, though you should always check the eligibility requirements just to be sure.

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Fill Out The Application

The grant-making organization should have an application on its website. You may have to print it out and mail it, or you might be able to fill it out online.

Each grant will require different information. Some info you may be asked for includes:

  • The name of your university and proof of graduation
  • Proof of employmenta pay stub or letter from an employer
  • Proof of residencesuch as a utility bill with your name on it
  • Legal identificationa drivers license or passport
  • Information on all the loans youre applying to get forgiven

Some organizations will ask you to write an essay about why youre applying and the work you do, include recommendation letters, or include a resumedepending on the type of grant.

Us Military Student Loan Forgiveness Options

Serving our country can be a great career. And there are good incentives to sign up and serve. Student loan forgiveness has been one of these programs.

If you’re considering a career in the military, find out if they will help pay down or eliminate your student loan debt. You can also look at our full guide to military and veteran education benefits.

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Can I Get A Pell Grant If I Have Student Loan Debt

Pell Grants are a type of federal award available to students with financial need. You can apply for a Pell Grant by submitting the Free Application for Federal Student Aid , and you may receive a grant based on your expected family contribution, your school’s cost of attending, and other information.

The amount offered through Pell Grants changes each year, and the maximum Pell Grant amount will be $6,495 during the 2022-2023 award year. You may receive a smaller Pell Grant based on your exact financial situation or you could receive an even larger grant if you lost a parent in Iraq or Afghanistan after 9/11. You can learn more about federal aid here.

Having student loan debt doesn’t disqualify you from federal grant programs, though going into default could make you ineligible.

Federal Employee Student Loan Repayment Program

Millions of borrowers could have student loan debt wiped out

The Federal student loan repayment program permits agencies to repay Federally insured student loans as a recruitment or retention incentive for candidates or current employees of the agency.

This plan allows Federal agencies to make payments to the loan holder of up to a maximum of $10,000 for an employee in a calendar year and a total of not more than $60,000 for any one employee.

It’s important to note that an employee receiving this benefit must sign a service agreement to remain in the service of the paying agency for a period of at least 3 years.

An employee must reimburse the paying agency for all benefits received if he or she is separated voluntarily or separated involuntarily for misconduct, unacceptable performance, or a negative suitability determination under 5 CFR part 731. In addition, an employee must maintain an acceptable level of performance in order to continue to receive repayment benefits.

Furthermore, you must sign up for this program when you’re hired. You can’t go back to your HR department after you’re already employed and ask for it.

You can learn more about this program here.

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Make Lump Sum Payments

Did you know that you dont have to wait until graduation to start paying off your student loans? You can make payments while you are still a student. Payments during this time go straight towards the principal of your loan, too. So, if your program has a paid internship or co-op program, or if you have a summer job, you can set aside some of your earnings to make lump-sum payments to help reduce your loan and shrink the interest payments.

Federal Health Service Corps

The newest National Health Service Corps possess many loan forgiveness programs having medical care masters that agree to are employed in government lack section. The level of the forgiveness hinges on the community too as the whether you performs complete-date or region-date, and exactly how enough time your satisfy their duties.

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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.

Circumstances For Student Loan Discharge

Only 1.5% repaying govât student loans as applicant numbers rise
  • 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.

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Perkins Loan Cancellation Options

Perkins loans operate very differently that most student loans. These loans are offered and administered by where you attended school. They also have a lot more loan forgiveness options than other loan types.

Perkins loans have unique requirements for loan cancellation based on the field you work in. Schools award these Federal loans to high-need students attending or planning to attend college. Make sure you fill out the FAFSA each year and check your financial aid award to see if you qualify.

Depending on the profession , Perkins loan borrowers can have up to 100% of their loan cancelled over the course of 5 years .

Heres how it works:

  • 15% of their principal balance and accrued interest can be cancelled after their first and second year of qualifying service.
  • 20% of their principal balance and accrued interest can be cancelled after their third and fourth year.
  • 30% of their principal balance and accrued interest can be cancelled after their fifth year.

Perkins loans also offer concurrent deferment if you are performing qualifying service.

Combining that postponement with these cancellation options means you could potentially never have to make payments on these loans. That’s a fantastic deal!

The professions eligible for cancellation and the requirements are listed below.

Nurse or Medical Technician: You must be a full-time nurse or medical technician. You may receive up to 100% student loan forgiveness. Check out our full guide to student loan forgiveness for nurses.

Student Loan Forgiveness In Canada

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According to a Canada Student Loans Program Statistical Review, 625,000 students received student loans during the 2018 2019 school year. Plus, the average loan amount was somewhere in the $5,700 range, while the average loan balance was over $13,300 by the time students completed their education.

Statistics also showed that around 330,000 students entered the Repayment Assistance Plan because they couldnt afford their loan payments . Are you a Canadian student struggling to pay off student loan debt? If so, you may be able to resolve the situation by getting loan forgiveness.

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Cancelling A Student Loan

Sometimes plans change. You may be able to cancel student loans that you no longer need or want.

Private Loans: You can cancel a private student loan up until midnight on the third business days after you receive the final notice of acceptance. Your lender or school cannot disburse your loan funds until after this three-day cancellation period expires.

Federal Loans: You can cancel your federal loans if you inform your school that you no longer want the loans by the later of:

  • The first day of the loan payment period .
  • If you did give your school affirmative written confirmation of the types and amounts of federal student loans that you wanted for the loan year before your school credited your loan funds, then you can cancel within 14 days after your school notifies you that you have a right to cancel your loans.
  • If you did not give your school affirmative written confirmation of the types and amounts of federal student loans that you wanted for the loan year before your school credited your loan funds, then you can cancel within 30 days after your school notifies you that you have a right to cancel your loans.

Tip: You might be able to cancel your federal loan after this time period, but that right is not guaranteed.

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