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Student loan forgiveness might seem too good to be true, but there are legitimate ways to get it through free government programs. The following options are available only to borrowers with federal student loans. Some programs have very specific requirements that make them difficult to qualify for, but income-driven repayment plans are open to most borrowers. » MORE: How to get loan forgiveness through borrower defense to repayment You’re not eligible for federal student loan forgiveness programs if you have private loans, but there are other strategies for managing private loan debt. » MORE: Income-based repayment: Is it right for you » MORE: How to get Public Service Loan Forgiveness. » MORE: How teachers can get student loan forgiveness » MORE: 3 student loan forgiveness options for nurses » MORE: Steer clear of ‘Obama student loan forgiveness’
Student loan forgiveness programs Income-driven repayment forgiveness The federal government offers four main income-driven repayment plans, which allow you to cap your loan payments at a percentage of your monthly income. When enrolled in one of these plans, your remaining loan balance will be eligible for forgiveness after 20 or 25 years, depending on the plan. These plans are most beneficial for those with large loan balances relative to their income.
Student loan forgiveness might seem too good to be true, but there are legitimate ways to get it through free government programs.
The following options are available only to borrowers with federal student loans. Some programs have very specific requirements that make them difficult to qualify for, but income-driven repayment plans are open to most borrowers.
» MORE: How to get loan forgiveness through borrower defense to repayment
You’re not eligible for federal student loan forgiveness programs if you have private loans, but there are other strategies for managing private loan debt.
» MORE: Income-based repayment: Is it right for youPublic Service Loan Forgiveness Public Service Loan Forgiveness is available to government and qualifying nonprofit employees with federal student loans. Eligible borrowers can have their remaining loan balance forgiven tax-free after making 120 qualifying loan payments. In order to benefit from PSLF, you’ll need to make payments while enrolled in an income-driven repayment plan. Otherwise, on a standard repayment plan, the loan would be paid off before you’re eligible to benefit from forgiveness.
» MORE: How to get Public Service Loan Forgiveness.Teachers employed full time in low-income public elementary or secondary schools may be eligible for forgiveness after working for five consecutive years. They can have up to $17,500 in federal direct or Stafford loans forgiven. To qualify, teachers must have taken out loans after Oct. 1, 1998.
» MORE: How teachers can get student loan forgivenessStudent loan forgiveness for nurses Nurses shouldering student debt have several options for student loan forgiveness: Public Service Loan Forgiveness, Perkins loan cancellation, and the NURSE Corps Loan Repayment Program, which pays up to 85% of qualified nurses’ unpaid college debt. Public Service Loan Forgiveness may be the mostly likely option for most nurses — few borrowers have Perkins loans, and the NURSE Corps program is highly competitive.
» MORE: 3 student loan forgiveness options for nursesObama student loan forgiveness There’s no such thing as “Obama student loan forgiveness.” However, some student “debt relief” companies use it as a catch-all term for free federal programs — which they charge to enroll borrowers in. If you encounter a company offering “Obama student loan forgiveness,” consider it a red flag. Enrolling in federal programs like income-based repayment and federal student loan consolidation is free to do on your own through the Department of Education.
» MORE: Steer clear of ‘Obama student loan forgiveness’Other student loan forgiveness programs There are a few additional niche student loan forgiveness or payment assistance programs you may qualify for through federal or state programs. Eligibility in these programs depends on your profession and where you work horse trailer loans
Publication 970 (2017) Tax Benefits for Education .
More than 550,000 people have signed up for a federal program that promises to repay their remaining student loans after they work 10 years in a public service job.
But now, some of those workers are left to wonder if the government will hold up its end of the bargain — or leave them stuck with thousands of dollars in debt that they thought would be eliminated.
In a legal filing submitted last week, the Education Department suggested that borrowers could not rely on the program’s administrator to say accurately whether they qualify for debt forgiveness. The thousands of approval letters that have been sent by the administrator, FedLoan Servicing, are not binding and can be rescinded at any time, the agency said.
The filing adds to questions and concerns about the program just as the first potential beneficiaries reach the end of their 10-year commitment — and the clocks start ticking on the remainder of their debts.
Four borrowers and the American Bar Association have filed a suit in United States District Court in Washington against the department.
The plaintiffs held jobs that they initially were told qualified them for debt forgiveness, only to later have that decision reversed — with no evident way to appeal, they say. The suit seeks to have their eligibility for the forgiveness program restored.
“It’s been really perplexing,” said Jamie Rudert, one of the plaintiffs. “I’ve never gotten a straight answer or an explanation from FedLoan about what happened, and the Department of Education isn’t willing to provide any information.”
The forgiveness program offers major benefits for borrowers, advocates say, to the point of persuading some people to take public service jobs instead of more lucrative work in the private sector. The program generally covers people with federal student loans who work for 10 years at a government or nonprofit organization, a diverse group that includes public school employees, museum workers, doctors at public hospitals and firefighters. The federal government approved the program in 2007 in a sweeping, bipartisan bill.
About 25 percent of the nation’s work force may qualify for the program, the Consumer Financial Protection Bureau estimated. Eligibility is based on a borrower’s employer and whether it meets the program’s rules, not on the specific work an applicant does.
On its website, the Education Department directs borrowers who believe their employer qualifies to submit a certification form to FedLoan. If the form is approved, the Education Department transfers the borrower’s loans to FedLoan, which collects payments and tracks the borrower’s progress toward the 120 qualifying monthly payments they must make before the remaining balances will be forgiven.
Only a small fraction of the millions of workers who might qualify for the program have begun the process of using it. Fewer than 553,000 borrowers have submitted at least one certification form to FedLoan and received its approval, according to Education Department data. Borrowers are encouraged to submit a new certification form each year.
But some of those approved borrowers might get bad news because it is unclear whether the certifications are valid.
Mr. Rudert submitted the certification form in 2012 and received a letter from FedLoan affirming that his work as a lawyer at Vietnam Veterans of America, a nonprofit aid group, qualified him for the forgiveness program. But in 2016, after submitting his latest annual recertification note to FedLoan, he got a denial note.
The decision was retroactive, he was told. None of his previous work for the group would be considered valid for the loan forgiveness program.
What changed Mr. Rudert said he did not know. After filing a complaint with the Consumer Financial Protection Bureau, he received a reply from FedLoan saying that his application “had initially been approved in error.” He has not been told what the error was, and has not found any way to appeal the decision.
Mr. Rudert and the American Bar Association filed their suit in December, alleging that the Education Department acted “arbitrarily and capriciously” in making its decisions about which employers qualified.
Last week, the department filed a reply that said that FedLoan’s responses to borrowers’ certification forms cannot be trusted.
A FedLoan approval letter “does not reflect a final agency action on the borrower’s qualifications” for the forgiveness program, the department wrote.
The idea that approvals can be reversed at any time, with no explanation, is chilling for borrowers. Mr. Rudert, who graduated from law school owing nearly $135,000 on student loans, said he would have picked a different employer if he had known that his work at Vietnam Veterans of America would not qualify.
A FedLoan spokesman would not comment on the case, referring questions to the Department of Education. A department spokesman also declined to comment on the suit or on any of the issues it raised, including whether any mechanism exists for borrowers to challenge a denial.
That lack of transparency has been a hallmark of the forgiveness program, said Natalia Abrams, the executive director of Student Debt Crisis, an advocacy group.
The program’s rules are complex. Only certain types of federal loans qualify, meaning that many borrowers need to restructure their debt to make it eligible — and the Education Department has done little to clarify gray areas, Ms. Abrams said.
No borrowers’ debts have been eliminated. Because 10 years of service are required, the first wave of qualified workers will be eligible to submit applications for debt forgiveness in October.
At that point, others whose certifications were approved by FedLoan could discover that the Education Department has a different position. Some employers clearly qualify — the definition of a “government organization” is fairly straightforward — but the rules for certain nonprofit organizations are harder to interpret.
“It’s kind of a no man’s land,” Ms. Abrams said. “We don’t know how this will pan out.”
Linda Klein, president of the American Bar Association, called the department’s response “illogical, untenable and bewildering.” An unreliable certification system “exposes those undertaking public service work — exactly what Congress intended them to do — to crippling financial risk,” she said.
Mr. Rudert left Vietnam Veterans of America in 2015 and now works at Paralyzed Veterans of America, helping former service members appeal denied applications for disability benefits.
The work is almost identical to what he did in his former job, Mr. Rudert said. Last year, FedLoan approved his certification request and deemed Paralyzed Veterans of America a qualified employer.A version of this article appears in print on , on Page B1 of the New York edition with the headline: U.S. Promises to Clear Debt for Students May Be False sallie mae smart option loan Order Reprints | Today’s Paper | Subscribe
Trump Wants To Forgive Student Loans For Disabled Veterans
It may be getting easier for some disabled veterans to erase their student loan debt.
The Department of Education announced Monday that it will partner with the Department of Veteran Affairs to identify disabled student loan borrowers who are eligible for debt forgiveness. Such borrowers will be notified of their potential eligibility in the mail and will also receive a Total and Permanent Disability Discharge application, the avenue though which borrowers with severe physical impairments are approved to erase their debt.
Such outreach is needed: Many disabled veterans are currently unaware that they can be eligible for student loan debt forgiveness, said Carrie Wofford, president of Veterans Education Success, a nonprofit advocacy group.
"It's horrific," Wofford said "There are disabled veterans who served their country who are financially struggling — and sometimes destitute — who are legally entitled to have their student loans forgiven but it's not happening."
Indeed, there are likely "tens of thousands" of severely disabled veterans who aren't aware of their federal student loan forgiveness options, according to estimates from the Consumer Financial Protection Bureau based on Department of Veterans Affairs data.
Recent changes in the tax law would benefit disabled veterans whose loans are discharged under the new initiative. A provision in the new tax code waives federal income taxes on forgiven education debt for permanently disabled people.
Historically, the IRS considered such cancelled debt as taxable income. For example, in 2017 the Lansing State Journal told the story of a veteran who had his $223,000 in student loan debt erased — only to receive a tax bill for around $62,000 how to get out of an upside down car loan
FinAid Loans Loan Forgiveness
The federal government offers assistance with educational loans through two programs: the federal student loan repayment program and the public service loan forgiveness program.
Federal Student Loan Repayment program
Through the Federal Student Loan Repayment program, participating agencies may award $10,000 a year, up to a total of $60,000, towards the payment of your student loans. In return, you have to work at that agency for at least 3 years.
All 15 cabinet-level departments participate in the program, plus more than 20 independent agencies. Many agencies specify the types of degrees necessary to qualify for the program and will tailor their plans to recruit highly qualified candidates for hard-to-fill positions.
The most common educational loans which qualify for repayment include:
If you are interested in applying, contact an individual agency to find out more about their specific loan repayment program. Many agencies also include information about loan repayment on their websites.
Public Service Loan Forgiveness program
Through the Public Service Loan Forgiveness Program, the government will forgive the remaining balance on your eligible student loans if you have worked in a public service job for at least 10 years fast auto payday loans
To qualify, you must have already made 120 monthly payments and you must be employed full-time in AmeriCorps, the Peace Corps position or another public service organization, such as:
Military Benefits News and Resources Military.com
False certification cancels any loan that was fraudulently originated by the school. False certification applies to loans disbursed after January 1, 1986, and is tightly defined to cover the following specific situations:
Ability to benefit
Every school must certify students are eligible for federal student loans. For students without a high school diploma or GED, this means the school must demonstrate the student is academically able to benefit from the school's programs before the student can take out a loan(s). If a school falsely certified you for a program for which you did not qualify, you may be eligible for loan cancellation.
Ability to benefit cancellation only applies to fraudulent certification. It does not apply to schools that misrepresent their education programs, the quality of their facilities and faculty, or their ability to help you find employment in your field of study.
Download the form for specific eligibility requirements and completion.
In rare cases, someone at the school has signed a borrower's name on a financial aid application without authorization, received the borrower's loan funds and the borrower received no benefit from those funds. If you believe an official at your school forged your signature on a promissory note or loan application, you may be eligible for loan cancellation.
Download the form for specific eligibility requirements and completion.
If your school certified your eligibility to study for a field in which you couldn't work, you may be entitled to loan cancellation. Barriers can include physical or mental conditions, legal status or other conditions that would legally bar employment in your field of study. An example of this may be a school knowingly admitting a felon into law school.
Download the form for specific eligibility requirements and completion.
If a student loan(s) was taken out in your name as a result of identity theft, you may qualify for a false certification cancellation.
Download the form for specific eligibility requirements and completion car title loans denver
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