Private and federal student loan debt currently stands at $1.6 trillion. Many borrowers struggle to make payments, and some studies suggest the default rate on federal loans could hit 40 percent by 2023. However, there are many payment options that can help federal student loan borrowers avoid default. There are also programs in place that can help federal borrowers receive loan forgiveness for working in certain types of jobs. Below, we have included more information about the types of jobs that qualify for forgiveness under certain programs. Federal, State and Local Jobs If you work for a federal, state or local entity, then you may qualify for the Department of Education’s Public Service Loan Forgiveness (PSLF) Program. Examples of qualifying jobs could include working for the FBI, CIA, state legislature or as a police officer for a municipality. However, there are additional requirements that are notorious for creating confusion. For…
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Last month’s blog discussed why many people are unable to receive loan forgiveness through the Department of Education’s Public Service Loan Forgiveness program (PSLF). The Department of Education allows some federal student loan borrowers working at certain public service jobs to receive tax-free loan forgiveness. However, the PSLF program has numerous requirements. You should ensure that you stay qualified if you are enrolled in this program. Please note that information in this blog post is subject to change, and that any recommendations in this post are not to be construed as legal advice. Make your payments on time You will need to make 120 timely payments to qualify for PSLF forgiveness. Your student loan servicer offers an automatic payment option. By enrolling in this option, your bank account will be automatically debited each month to pay down your balance. If you’re financially organized and aware of the timing of these…
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George W. Bush signed the College Cost Reduction and Access Act (CCRAA) into law in 2007. The CCRAA created the Public Service Loan Forgiveness Program (PSLF), which allows some federal student loan borrowers working at qualifying public service jobs to receive tax-free loan forgiveness. Student loan borrowers qualify for forgiveness under PSLF if they meet the requirements—for which there are many. Unfortunately, student loan servicers and the Department of Education failed to effectively communicate these requirements to borrowers. Many borrowers who believed they were eligible for PSLF forgiveness are finding out their loans or jobs never qualified. As a result, some borrowers have made the required ten years of payments only to find out their loans were never eligible for forgiveness. You can only receive PSLF forgiveness if you meet the following requirements: Requirement #1: You have federal loans. Private loans do not qualify for PSLF. If you are thinking…
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