What Is Student Debt Forgiveness?
Did you know over 32 million student loan borrowers are repaying loans that could be eligible for forgiveness?!
Student debt forgiveness relates to the fact that you are no longer obliged to repay the debt used to pay for college. It is a revolving loan program for people who borrow more money than they can return. Acquired student debt is not a sin because if such were the case, 45 million people would be advised to seek confession at the local confession booth because they owe a collective $1.7 trillion in debt. It is not reversible, but it can be forgiven to some degree.
Forgiveness entails the cancellation of all or a portion of your student loan. However, the federal government does not just wave a wand and erase everyone's debt. You must qualify for forgiveness, which is difficult because one of the prerequisites is typically ten years or 120 months of consistent and on-time payments. Forgiveness of private student loans is significantly more difficult. That is only possible if you suffer a total and permanent impairment or death.
Are you one of the 32 million?!?
Jobs that qualify for Public Service Loan Forgiveness (PSLF) include all public sector jobs. Usually tax-payer funded and service driven, public sector jobs are available among many different employment areas including: Education, Electricity/Gas/Oil, Emergency/Fire Services, Healthcare, Infrastructure, and Law Enforcement.
Some of the largest employers in the U.S. offer public sector jobs such as city school districts, city, county, state, and federal government agencies, public hospitals and healthcare centers, and community and state colleges and universities.
Below are some of the most common public sector jobs in the U.S. that qualify for PSLF:
- Elementary school teachers
- Teacher assistants
- Secondary school teachers
- Law enforcement officers
- Middle school teachers
- Office clerks/secretaries and administrative assistants
- Registered nurses
In addition to public school teachers and professors, city, county, state, and federal employees, public health nurses, and nonprofit employees, other specific examples of public sector jobs include, but are not limited to:
- Animal control officers
- Civil rights workers
- Classroom aids
- Coast guards
- Community education directors
- Computer occupation employees
- Correctional officers/Bailiffs
- Crisis line counselors
- Developmental disabilities specialists
- Domestic violence shelter employees
- English language educators
- Financial case workers
- Free healthcare clinic employees
- Graduate teaching assistants
- Guidance counselors
- Head Start teachers
- Homeless shelter managers
- Hospice care workers
- Immigrant support specialists
- Immigration and customs inspectors
- Mental health therapists
- Military personnel
- Natural Resources Conservation Service employees
- Operation specialists
- Peace Corps/Americorps officers
- Postal service employees
- Social workers
- Special education teachers
- Substance abuse counselors
- Tribal government employees
It is important to note that in order to qualify for PSLF, public sector employees must work full-time or at least 30 hours per week.
Are Student Loans Forgiven Upon 25 Years of Settlement?
Forgiveness is the greatest form of student loan debt relief, but it is exceptional. Only direct federal government loans are qualified for forgiveness. Stafford loans, which were sorted out in 2010 in exchange for direct loans, are also qualified. If you have other federal loans, you may be qualified to merge them into a single direct installment loan. Loans made by non-federal lenders or private lenders and loan businesses are not eligible for forgiveness.
The maximum period of repayment is 25 years. Any leftover debt will be canceled or forgiven after 25 years. Under the relevant law, the amount of debt released is classified as taxable income, which means that you will owe income taxes on the amount canceled taxes that years from now. However, the savings might be substantial for those interested in careers in public service. And, because you will be paying the tax years from now, the tax's net present value is lesser.
Besides student loan forgiveness, public sector jobs can offer competitive compensation, generous benefits, job security, and a sense of community, pride, and purpose.
If you’re one of the 32 million people who work as a public service employee and who have federal student loans, make sure you’re enrolled in an income-driven repayment plan and making on-time payments each month! After 10 years of repayment, you can have your student loans totally forgiven!
Not sure if you have federal student loans? No worries! Are your loans with any of these student loan servicers? Great Lakes, Navient, Nelnet, AES, or Fedloan? If so, you probably have federal student loans that qualify for PSLF. You can also check who your loan servicer is by logging into your Federal Student Aid account. If you don’t have federal student loans, you unfortunately will not qualify for forgiveness. However, there are chipping tools that you can use to chip away at your debt.
You’ll need to be enrolled in an income-driven repayment (IDR) plan. An IDR plan will cap your monthly payments in proportion to your income so for many student loan borrowers, this means lower monthly payments! Enrollment in an IDR plan is a requirement for PSLF and not an optional suggestion. However, many student loan borrowers will need to consolidate their loans before enrolling into an IDR plan.
Finally, to achieve complete student loan forgiveness, applicants will need to make at least 120 payments or 10 years of on-time monthly payments while they were enrolled in an income-driven repayment plan.
The necessary PSLF requirements can seem overwhelming and strenuous. But don’t worry! Chipper is here to help! We can help you consolidate your loans if needed, enroll in the income-driven repayment plan that is best for you, and stay on track to achieve total forgiveness. We have felt public service employees from all over the U.S. qualify for the Public Service Loan Forgiveness program.
Some of our most recent success stories (June, 2020) include a teacher in Austin who we helped become eligible for PSLF and save over $148,000 in student loan debt! We also helped another educator from Dallas become eligible for PSLF who will save over $230,000! Chipper can help you too! Click below to get started or to chat with one of our trusted student loan expert team members!