Have you ever wondered if student loan forgiveness is legit? Actually, student loan repayment programs have aided millions of overburdened with student loans like those from low-income families.
In 2018, more than 44 million Americans owe a staggering $1.5 trillion in student debt. If you’re one of them, student loan forgiveness may just be your way to debt freedom.
What Happens if I Can’t Pay My Student Loans?
Your federal student loans will become delinquent on the first day you fail to repay them. After 90 days, you’ll be reported to credit bureaus and you might go into default after a period of time.
The US Department of Education warns that failure to repay student loans can have disastrous consequences. They recommend contacting your loan servicer immediately for ways to avoid default status.
If you default on student loans, you will lose its various benefits. These include your repayment plan options and your deferment and forbearance privileges. You will also be barred from further federal student aid. Worse, your school reserves the right to withhold your academic transcript until you’ve satisfied your default loans.
Your loans could also enter acceleration, meaning your education debts and its interest will be immediately due. Also, your federal benefit payments and tax refunds can be diverted into your defaulted loan.
If you’re earning, a portion of your salary can be garnished to further repay balances. If you don’t request for student loan forgiveness soon, you could be taken to court and saddled with numerous legal fees.
How Do You Get Student Loans Forgiven?
Your student loans are eligible for forgiveness if you meet certain criteria. Student debt forgiveness or cancellation is intended for people with certain jobs.
Meanwhile, borrowers who can’t repay due to other circumstances can apply for student loan discharge. These may come as income-driven repayment plans that last 20 or 25 years.
Public Service Loan Forgiveness (PSLF)
You can apply for PSLF if you are working for a nonprofit organization or a government office. Also, you should have taken out a direct loan for education.
Your repayment plan and employer must also fit certain qualifications. If you meet these criteria, the PSLF may forgive your remaining balance after 120 monthly qualifying payments.
Perkins Loan Cancellation and Discharge
If you took out a Federal Perkins Loan, you may have it canceled or discharged. You can apply for cancellation if your job is listed under the qualifications.
Otherwise, you could file for discharge if you can’t repay due to other circumstances. You can request for these Perkins Loan forgiveness options from your school or your loan provider.
Other Student Loan Discharge Options
As we’ve mentioned, you can file for discharge if your situation isn’t eligible for student loan forgiveness. You may have withdrawn from your school, but it didn’t return loan funds to the servicer.
If so, you can apply for an unpaid refund discharge of some of that loan. If schools or educational service agencies fail to meet loan requirements, the borrowers could also request for discharge.
Your school may have failed to perform actions related to your loans or its corresponding educational services. Consequently, you can request for borrower defense to repayment.
In some cases, you might be allowed to discharge if you’ve declared bankruptcy. If a borrower becomes disabled or deceased, the discharge may also apply.
What to Know About Student Loan Forgiveness
You should ask your loan servicer for its student debt forgiveness and discharge options. Particularly, you should ask if you’re allowed to defer payments during your application. Once it’s accepted, you’ll be absolved of your student debt obligations.
Otherwise, you must continue the monthly payments for your student loans.
Be aware of the long-term consequences of student loan cancellation on your career. We’ve mentioned that people must enter certain lines of public work in order to avail of forgiveness. If you’re planning to pursue other fields, it can delay your desired career growth. Furthermore, you must check your state for its specific eligibility requirements for student debt forgiveness.
Look Out for Student Loan Forgiveness Scams
Watch out for fraudulent student aid companies to avoid losing money and sharing personal information. These scammers will often entice you with fake offers and pressure you into taking them immediately.
In exchange, they will charge exorbitant fees and gather private details about yourself. They will provide no assistance in return and will use your personal info to make payments under your name.
Fake student aid agencies require compensation for services that may be obtained for free. You could pay upwards of $1,000 for commercial student aid, but fraudsters can charge you for free federal aid too.
What’s more, the government requires no payments for other federal student aid services. For example, you should avoid dealing with a student aid company that charges for FAFSA forms.
How to Protect Yourself from Scams
You should also follow the following tips to protect your identity as you apply for student aid. First, make sure you’re on the official online site or smartphone app when filling up your FAFSA form.
Afterward, exit the application and close your browser, and it will automatically delete the related cookies. You should also keep your FSA login details private, even to someone helping you fill it up.
Moreover, you should never share your personal details on the phone or the internet unless you’ve made contact. The Federal Student Aid office secures all student loan applicant information inside the National Student Loan Data System.
Nevertheless, you must review and monitor your financial aid programs. You may also request the student aid office for a list of legitimate aid providers.
Student loan forgiveness is a legitimate way of facilitating education debt payoff. If you meet certain criteria, the federal government may deduct or remove your student debt obligations. Visit the student aid website for income-based repayment and additional info.