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There are many benefits to attending college, such as expanding your knowledge, growing personally and meeting new people. But the cost of tuition and living expenses can be extremely daunting, especially if you’re planning to attend an expensive university or take out student loans.
Fortunately, there are different ways you can ease the financial burden of attending college without giving up on your education. If you have taken out private student loans to finance your degree, consider exploring options for student loan forgiveness or loan repayment assistance programs. These programs often have various eligibility requirements, so read on to learn more about your options for reducing the cost of your student loans.
What is a Qualifying Condition for Private Student Loan Relief?
There are a variety of different circumstances that may enable you to qualify for relief on your private student loans. The following are examples of triggering events that may enable you to qualify for student loan forgiveness:
- Death of the student loan borrower: This is the most common type of student loan forgiveness. In this scenario, the student loan is discharged upon the death of the borrower. The death of the co-signer, however, does not qualify for student loan forgiveness.
- Disability: If you’re unable to work because of a medically documented disability, student loan forgiveness may be an option for you.
- Bankruptcy: If you have concluded all other possible methods for repaying your student loans, you may be eligible for bankruptcy relief.
- Economic hardship: If you’re experiencing difficulties making your student loan payments, you may be eligible for deferment, forbearance or an income-driven repayment plan. And if your financial hardship is severe enough, you may qualify for student loan forgiveness.
Student Loan Repayment Assistance Programs (LRAPs)
Student loan repayment assistance programs are government-sponsored initiatives that help student loan borrowers repay their debt. The following programs may be right for you if you’re struggling to pay back your student loans.
- Federal Loan Repayment Assistance Programs: These programs are administered by the Department of Education and are available to all federal student loan borrowers, regardless of the lender. The following programs may be right for you if you’re struggling to pay back your student loans.
- Public Service Loan Forgiveness (PSLF): PSLF is a program that forgives the remaining student loan debt of individuals who work in the public sector for 10 years (certain exceptions exist). This program has a high cost, as you must make a special tax-deferred student loan payment each month for 10 years. Depending on your income, your monthly payment may be $0.
Public Service Loan Forgiveness (PSLF)
PSLF is a program that forgives the remaining student loan debt of individuals who work in the public sector for 10 years (certain exceptions exist). This program has a high cost, as you must make a special tax-deferred student loan payment each month for 10 years. Depending on your income, your monthly payment may be $0. In order to be eligible for PSLF, you must meet the following criteria:
- You must be employed by a qualifying public service employer.
- You must make 120 qualifying monthly payments.
- Your payments must be made through the standard 10-year repayment plan.
- You must be enrolled in an income-driven repayment plan if you have Direct Loans with a high balance.
Debt Discharge and Cancellation: Strategies to Qualify for Relief
Many of the conditions that qualify you for student loan forgiveness also qualify you for loan discharge. However, there are some additional strategies you can employ to qualify for student loan forgiveness, including:
- Repayment Assistance: Many repayment assistance programs allow you to make smaller payments or delay payment on your loans. Repayment assistance is not a discharge of your debt but a reduction of your payment due.
- Public Service Loan Deferment or Forbearance: If you work in qualifying public service positions, you may qualify for deferment or forbearance on your student loans. Deferment is a period of time during which your loans are not being repaid. During forbearance, you continue to make payments on your loans even though they are not being repaid.
- Alternative Repayment Plans: Income-driven repayment plans are an excellent way to reduce your monthly payments and make your student loans more manageable. These plans are designed to take your monthly income into account.
- Consolidation: If you have several different loans that are difficult to manage, you may be able to combine them all into one loan. This strategy may simplify your repayment process and help you qualify for lower payments.
Student loan forgiveness is a great way to significantly reduce the cost of your loans. The best way to qualify for this type of repayment assistance is to work in the public sector. The sooner you begin repaying your loans, the sooner they will be forgiven. If you are struggling to make payments on your student loans, consider exploring your options for relief.