Student loan forgiveness, which is known as discharge or cancellation, sets you free of your commitment to pay back all or some of the federal student loans you borrowed. Eliminating or reducing your student loans dues can offer notable financial relief.
This can be a blessing to many due to the increasing average student loan interest rate. According to Lantern by SoFi, you should know that not everybody can qualify for federal student loan forgiveness. However, there are several student loan forgiveness programs.
- Closed School Discharge
You might become eligible for a student loan forgiveness if your school closes its doors under specific conditions. If you do become eligible, the loan discharge will relieve you from the obligation to pay back your student loans, and you might even be eligible to get a full or partial refund of your previous payments. To become eligible, your school must shut down within 120 days after your withdrawal or while you are enrolled. You can also be eligible if you are on an accepted leave when the school closes. The loans that qualify include federal Perkins loans, federal direct loans, FFEL loans
- Perkins Loan Discharge and Cancellation
Through the Perkins loan cancellation program, they can cancel 100% of a Federal Perkins However, to qualify for loans, you have to be working as a qualified volunteer or a qualifying public service job for at least five years. To become eligible, borrowers must be employed in a qualifying job, normally one that requires assisting the public in a crucial area of need and have a Perkins Loan. For example, teachers can be eligible if they work in a school that serves children from low-income areas.
- Permanent and Total Disability Discharge
If you are not able to get a job because you are permanently disabled, you can be qualified to have the remainder of your student loan balance discharged. You have to offer documentation from a physician or the social security administration proving permanent or total disability. The government might keep an eye on your disability or finances for three years and restore your loans if you don’t match the requirements. The loans that qualify as FFEL loans, Federal Direct Loans, Federal Perkins loans
- Teacher Loan Forgiveness
This program offers student loans forgiveness to qualified teachers with up to $17500 worth of Federal Stafford loans or Direct Loans. The teachers must have been employed for at least five successive years at a secondary school, educational service agency for low-income students, or elementary school. For a teacher to become eligible, they must not default their loans and must be employed full time a highly qualified teacher for five successive academic years at a certified low-income school. Highly qualified usually means the teacher has state certification and a bachelor’s degree or a teaching license. The loans that qualify include unsubsidized and direct subsidized loans and unsubsidized and subsidized federal Stafford loans
You should refinance your student loans to reduce your interest rates