It can be pressing to find student loan debt relief, especially if you have lost your job or are earning less income due to the coronavirus. Fortunately, it’s easier to get payment relief for student loan debt right now, regardless of what type of loan you have. For example, if qualifying individuals borrowed loans from the U.S. Department of Education, they automatically receive a new 0% interest rate from March 2020 to September 2020. During this specified time period, no payments are required. In addition, if you are behind on a loan payment to the Dept. of ED, your wages, tax refund, and Social Security payments can’t be withheld and sent to a third party. Read on to learn about several student loan debt forgiveness programs available during COVID-19.
Federal forgiveness is one major student loan debt forgiveness program available during COVID-19. Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, any non-payment of federal student loans during this period counts towards student loan forgiveness. In addition, student loan rates have been set to 0% on federal student loans from March 13, 2020 to September 30, 2020. Notably, not all loans qualify for these benefits. For instance, because Perkins Loans and FFELP loans are not owned by the U.S. Department of ED, they do not receive the same forgiveness. Moreover, you must meet certain qualifications such as full-time employment to obtain the full benefits of the federal forgiveness programs. Federal forgiveness is one major student loan program to reduce financial stress during the pandemic.
Public Service Loan Forgiveness Programs
Public service loan forgiveness (PSLF) programs are another debt remediation plan available to individuals with student loan debt during the pandemic. If you a government or nonprofit organization employs you, you may be eligible to receive debt forgiveness under PSLF programs. After you have made 120 qualifying monthly payments under a repayment plan, PSLF forgives the remaining balance on your direct loans. However, this applies if you have been working full-time for a qualified employer. Notably, Federal Family Education Loan (FFEL) Program loans and Perkins Loans may meet eligibility requirements if they are consolidated into the direct loan program. Through PSLF, you may also obtain CARES Act benefits. PSLF programs are another student loan debt relief option available during COVID-19.
Income-Based Repayment Policies
In addition, income-based repayment (IBR) policies also forgive students for their loan debt. IBR programs typically cap your student loan payments at 10 or 15% of your income. Once you have made IBR payments for 20 or 25 years, any remaining loan balance will be forgiven. The length of time depends on when you borrowed the money. Usually, IBR programs tax forgiven loans as income, potentially increasing your tax bills. IBR payments are eligible to individuals who receive a lower charge than what it would be under the standard repayment plan. Some loans may not qualify for income-based repayment. However, they do typically cover direct subsidized and unsubsidized loans as well as consolidated Perkins loans. IBR policies are another student loan debt forgiveness program available during the coronavirus crisis.
State-Sponsored Repayment Assistance
Moreover, state-sponsored repayment assistance may be able to student debt repayment programs. For licensed nurses, doctors, lawyers, and teachers, there may be plans available to assist with student loan debt. For instance, the Mississippi Teacher Loan Repayment Program pays up to $3,000 annually for a maximum of four years on undergrad educational loans. This applies to licensed teachers who have been educating full-time in a specified geographic or subject area. There are similar programs available for nurses, doctors, and hired business lawyers as well. Contact your state’s department of education to learn more about your state’s programs and the necessary qualifications. State-sponsored repayment assistance is another available program for student loan debt forgiveness amidst COVID-19.
Teacher Loan Forgiveness
Furthermore, teacher loan forgiveness is another program option available during COVID. If you teach full-time for five consecutive years in a low-income school district, you may be eligible for forgiveness. Potentially, you can receive up to $17,500 in forgiveness on Direct or FFEL program loans. Once you have completed your teaching service, you can fill out an application form for student aid. Only Direct subsidized and unsubsidized loans qualify for teacher loan forgiveness. Typically, PLUS loans do not qualify. There are also teacher loan forgiveness programs available by state, each with different requirements. Teacher loan forgiveness is a great opportunity for educators in low-income areas to lower student loan debt during the pandemic.
There are several student loan debt forgiveness programs available during COVID-19. For example, under the CARES Act, federal forgiveness provides payment relief to individuals with debt to the U.S. Dept. of ED. There are also Public Service Loan Forgiveness programs to forgive remaining loan balance after a certain period of payments. Income-based repayment policies cap your loan payments based on your income. Moreover, teacher loan forgiveness provides aid to dedicated teachers educating in low-income areas. Furthermore, state-sponsored repayment assistance also has programs available for nurses, doctors, and lawyers. Alternatively, there are student loan refinance options to consolidate your debt. Consider the points mentioned above to learn about several student loan debt forgiveness programs available during COVID-19.